LEARNING about money from a young age is the key to financial success, say experts.
While primary school children in Scotland, Wales and Northern Ireland are taught about money as standard, more than four million kids under the age of 11 in England miss out this key area of learning.
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But parents have an important role in helping their children understand money, too.
Teaching them about money will give them an essential life skill.
Stewart Perry, of financial education charity The Centre For Financial Capability, says: “We’re not talking about teaching kids investment banking but the concept of what money is and what it’s for.”
Laura Shannon takes us through everything you need to tell your children about money.
KNOW YOUR POUNDS FROM PENNIES
KIDS need to get to grips with cash. Get them to handle coins and teach them the difference between value and quantity.
Young children may be surprised to learn that a single pound coin is worth more than several pennies.
Try pricing up items around the house and give your child spending money.
See if they can work out how much they need to pay in your pretend shop.
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YOU HAVE TO EARN IT
TELL your children that you work to earn money — or why you get an income from benefits.
Explain that it pays for food, bills and all the things you need. Parents who don’t explain this are more likely to be treated as cash machines.
Let your kids experience earning by paying them to do chores once they are old enough.
Explain the difference between wanting something, like a toy, and needing something, like food. It’s important they know what essentials are.
BANK ON IT
A CHILD can have a bank account from the age of 11 or a children’s account from the age of six — check out GoHenry, nimbl and Starling Kite.
Scam awareness is vital for older children, too. Families can find help at getsafeonline.org.
Talk to them about how to grow money. Explain that if you put money into a savings account, you are paid a reward known as “interest”.
The more you save, the more interest is added. Over time, this can add up to a large sum.
GIVE RESPONSIBILITY
YOU don’t want to worry or burden your children about money. But involving them in financial choices from a young age will help them to make better decisions in life as they get older.
Naomi Darling, from financial education charity MyBnk, warns that frightening headlines about the economic crisis, along with financial stress at home, can rub off on children.
She says: “Having open and honest conversations about money can prepare them for the future and improve their wellbeing.”
Coram Life Education teaches money lessons to young children.
The charity’s Harriet Gill says: “The trick is to introduce money gently so children feel responsible, but not overwhelmed.”
SAVE TO SPEND
ENCOURAGE kids to set a savings target. Plan ways to squirrel away money so they can achieve their goal.
You could also set a family savings target and work together to pay for something you all want — such as a day out.
BILLS, BILLS, BILLS
WE get bills for gas and electricity, council tax, water, broadband, and more.
Young kids can be told a simple message about them being paid from bank accounts.
Talk to older children about digital money and how direct debits and standing orders work as a way of organising payments. Teach them about budgeting.
Explain the limits you have, such as how much you spend on groceries and why you’re cutting back on energy at home. Remind children to check with you before subscribing to anything.
Smartphone games with in-app purchases can catch you out when the phone bill arrives.
DEBT ISN’T ALWAYS BAD
CHILDREN need to know the difference between a responsible debt that pays for a need, like a mortgage, and a costly debt that pays for a “want”, such as a holiday.
It’s OK to have debt, as long as you can afford to pay it off.
It’s better to discuss it now, rather than when they first move out or see something on TV that they want.
WE SAVED £1,000 TO GO ON A TRIP TO DISNEYLAND
SINGLE mum Sophie Palmer and her son Mal’achai have saved £1,000 over the past year.
The scientist, from Bournemouth, will now use the cash to pay for a trip to Disneyland Paris for the pair.
Mal’achai, 11, uses the GoHenry app to set his targets and watch the savings tot up, and has a debit card that can be used in shops.
Sophie, 35, says: “I wish I’d had a head start with money to avoid some issues and missed opportunities.
“But I can prevent Mal’achai going through the same.”
The Scouts money badge gives kids practical life skills
SCOUT leader Andrew Thorp, 41, has helped 18 boys and girls aged between six and eight to get their Money Skills Activity Badge.
He says it helps develop children’s confidence and understanding of money.
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The dad-of-three, from Enfield, North London, said: “Every family is facing a different challenge financially and we need to make young people aware of that.
“People think Scouts is just about camping and climbing, but we provide practical skills for life, too.
“ That’s where the Money Skills Activity Badge comes in.”
Bye for now…
I’VE been thinking about what financial lessons I will teach my children as I’m about to become a mum myself.
When I was little, my dad used to ask me to pick out shares in the Sunday paper, which I could put my pocket money on, and then I could see if my piggy bank contents would go up or down.
I had a bank account when I was 16 and I saved up cash from chores to pay for clothes.
Money was never a taboo subject at home and even when I made mistakes, such as spending too much of my student loan during freshers’ week, my parents were supportive when it came to discussing finances.
This is my last week editing the Sun Money pages for a while as I am taking maternity leave.
I leave you in the capable hands of my team, with Sun Savers editor Leah Milner at the helm.
See you soon!
Tara Evans, Head of Consumer
This post first appeared on thesun.co.uk
