Do your children understand the importance of money?

No one wants to make their children grow up too soon without enjoying the innocence of childhood. But along the way to adulthood, there are some fundamental lessons in finance that can prepare them for the real world. 

More than ever before, the ability to appreciate and respect money can be a huge advantage in life. Here’s how you can get your children to see money saving as a key part of their future. 

Have you led by example? 

It’s one thing to preach to your children about how important saving for the future is. But how have you shown them that you apply the same principles to your daily life to lead by example? 

Setting up a Junior Cash ISA or a Junior Stocks and Shares ISA gives them the chance to witness just how important saving money can be. Not only will they be able to see their little nest egg grow each year, but they’ll gain valuable insight into how money works, and the time and care it takes to gain it. 

Do you give them regular pocket money?

Every kid has a toy or a game that they’re desperate to get. And if you give them regular pocket money, this can be a teachable moment about saving for the things you want to buy. 

The biggest benefit of this is the time it will take them to save for something they are eager to have, which provides a crash course in how expensive some of the things they take for granted may be. 

You can even offer some small financial incentives for good behaviour, good school work, or doing more chores around the house. This teaches them about the value of hard work and the rewards that come with patience.

Have you had open conversations with them about finances? 

No one is expecting you to show your children your bank balance or ask them to deal with the latest energy bills. However, there are some creative but extremely important ways of educating your kids about the true value of money management, budgeting, and taxation. 

For younger children, this could be something as simple as showing them how taxation works by using toys, beans, or even sweets as an example. You can also use toys or sweets to represent your weekly/monthly wage, and show them how a portion of it goes to bills and taxes, and how another portion goes to your savings. Then, what’s left over is theirs to enjoy as they please!

It may sound like you’re pushing adulthood on them too quickly, but understanding how wages, debts, and other variables work can illuminate the benefits of saving money and give them a positive first impression of how important having savings are.

By having open and honest communication with your kids, you’ll be able to reduce the stigma surrounding money discussions in the house and help to give your children a better understanding of money. In no time at all, you’ll see them making saving plans of their very own!