Teaching your children to save before they spend
Helping your children to manage their money from an early age will set them up with a key life skill for years to come.
Those important childhood habits will stand them in good stead for when they really need that financial knowledge
later in life, perhaps when they are away at university, getting a Saturday job – or setting up home for the first time.
They will get an idea of spending and saving from a number of directions, including teachers, their young friends, social media and advertising.
But it's clear that you, their parents, can be one of their best teachers.
By getting them involved and learning 'save before you buy' from childhood, they will see the value of regular saving – in their money box and then a savings account where the money's put away in a safe place away from temptation.
Up until then it might be that your children's normal contact with money is probably watching YOU getting it from a cashpoint (they'll need to be told you have to put money into the bank first!).
Giving your children pocket money isn’t just for treats – it’s to help them learn about and managing money independently. And knowing that you, their parents, only have a certain amount available for treats will show them the value of saving.
So saving up small change, pocket money – or 'wages' for keeping their playroom tidy will soon set the wheels in motion.
Mum-of-two Sharon Astill, from Carlton, Nottingham, said: “We’ve set up a regular standing order to their building society accounts which pays in monthly – although there’s always the threat of it being withheld if their bedrooms aren’t tidy!
"We also try to find them extra little jobs to do around the house and garden to boost their pocket money. It’s good for them to be rewarded for something they've actually done and then see their savings grow so that they can spend the money themselves on something they really want.
“One thing that fascinates them is the interest going onto their statements each month, even though it’s only a few pence.
“They manage their money in very different ways. Our teenage girl regularly treats herself to hot chocolate in city cafes with her friends, while our son, who’s a little younger, saves up for books and Xbox games.“
Here are Sharon's top three tips for when you could pay your kids extra:
- Regular chores: Keeping their bedroom tidy, emptying the dishwasher, good behaviour.
- Being responsible: Looking after their pet, happily doing homework, cleaning, making sure their washing’s in the linen basket.
- Rewards: Doing well at school, passing an exam, scoring at football.
Mandy Sheldon, who’s a senior customer adviser at the Asbourne branch of The Nottingham, has been helping children get to grips with money through our Money Academy initiative.
She said: “The teachers are crying out for some knowledge and more financial education on the syllabus because it’s mostly only available through businesses like ours.
“Kids go through childhood not just to 16 without knowing but through to 21 when they have already got a big debt and no real experience of how to deal with money.”
In fact, they only need as little as £1 to open an account and they will see the interest earned make their savings grow.
It's also good experience for them to pop into a branch with you, actually draw some savings out, take the money to a shop and hand it over. And read through their regular statements with them to show how their account has gone up – and down (if they have been spending their savings).
Our Robin Hood Young Saver account
requires just £1 to open and you'll receive a great Robin Hood money box and bag of goodies straight away, followed by three more money boxes to collect as their savings increase.
For longer-term saving a Junior Cash ISA
can be opened by a parent or grandparent. This works the same way as a savings account and the money grows to form a nest-egg.