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How to turn financial planning into child’s play!

managing-money

In recent years secondary schools have been required to teach pupils how to manage their money. Lessons in “Financial Mathematics”, covering topics such as percentage changes and calculating interest, are now even included in the national curriculum.

Within their citizenship classes, pupils are learning how public money is spent, as well as how to manage their own money and approach some of the financial planning decisions they often need to make in later life.

Parents have an important role to play in influencing their children’s attitude to personal finance. Allowing your child to see you making responsible financial decisions and helping them to appreciate the difficult skill of “delayed gratification”, is invaluable in a consumer society that encourages us to spend our money freely.

Children can also learn practical lessons in managing money if they receive pocket money or rewards for helping around the house. A regular, set amount soon teaches your child lessons about how to budget and that money is not an unlimited resource!

As your children become teenagers, you could explain your day-to-day financial management in more detail by involving them in working out the monthly household budget, or when shopping around for a better deal.

When your children get their first job it can be a great time to talk to them about saving, whether it’s for a specific goal, or just to have some money set aside for a rainy day – for example, you could help them to set up a direct debit into a savings account from their first pay packet.

By explaining how interest works, they should be able to understand that an early savings habit should produce greater financial rewards down the line. Older teenagers should also be able to grasp the risks and rewards of investing in shares rather than cash. You could also explain the benefits of saving into an ISA, or even the Help to Buy ISA where the Government boosts savings by 25% for first time buyers.

Teenagers are known to be influenced by their parents attitude towards personal finance, so setting a good example and highlighting the dangers of financial mismanagement are lessons they will (hopefully!) listen to.

If you need independent financial advice then fill in our contact form to arrange a no obligation review, or call us on 0113 3878240.

Clayton Holmes Naisbitt