Like most families, we watch what we spend. The cost of living is still rising faster than wages. So, if you want to control your debt levels you need to budget carefully. Managing money well is defiantly a life skill you want to be able to pass onto your kids.
Being cash savvy will benefit your children in numerous ways. Below, are some ways you can do this without overwhelming or making them worry too much about money.
Start to save for their futures early
Opening a savings account or junior ISA for each of your children is an excellent idea. If you go down the junior ISA route, at the age of 18 they will have access to a pot of money. They can use this for driving lessons, to buy a car, or stop themselves going into to debt to stay in education or travel a bit.
It does not matter how much you put into their savings accounts or ISA. The key is to save regularly and demonstrate to your children how the cash can build up. It also teaches them the importance of looking ahead in life and saving for the long as well as the short-term.
Get them a bank account at an early age
It is possible to open a bank account for your child at any age. But, up to the age of about 13, one of you will need to be named on the account.
When your child is given money by you, friends or relatives, encourage them to put the cash into their bank account. Download the bank’s app or open an online banking account and get your kids into the habit of tracking their cash, at least once a week. At first, you will need to sit down alongside them to do this. But, pretty soon, they will know how to monitor their cash flow themselves. At that stage, you will only need to check in with them occasionally.
Teach them to live to a budget
When they are old enough, you can help them to start budgeting. If they have pocket money, encourage them to save some of it. Then budget the rest out. Let them decide how much of it they plan to spend on days out, sweets, presents and other things they like to buy. You will be surprised by how disciplined they will be about budgeting. Some kids end up being better at their parents at resisting temptation.
Offer them rewards for good money habits
To encourage them further, consider offering them a reward for their efforts. For example, every time they add another £100 to the savings that they control themselves, make an additional contribution or take them for a treat.
Get them involved in your home finances
You can also start teaching your children about how money works. Sitting down with them to find a better electric deal for the family or getting them to help you to get insurance quotes are both good ideas.
Later, teach them about credit and borrowing money. They will need to understand these matters to be equipped to get a mortgage and buy their first home. This article contains several great tips that will help you to educate your kids about borrowing and debt.