It’s incredible how much kids learn at school. From the useful stuff like maths and science, to the stuff you maybe don’t want them to know that they learn from their friends! The general consensus amongst most parents and school leavers alike, however, is that more real life skills should be taught in schools. Many kids leave for university with no idea how to look after themselves or how to do all the life admin that comes with being an adult. Although maths is taught is school, it is rarely explained how this applies to real life situations. A shortcoming when you consider it will mostly be used for personal finance issues. So it seems that the responsibility rests with parents to ensure that kids learn how to manage their money with military precision!
It is important to teach kids from a young age about the value of money. One way to do this is to give them pocket money and show them what this can (and can’t!) afford. Don’t scare young children by making them worry about finances, but make them aware that things do cost money and that you have to work hard in order to be able to afford luxuries. Older kids should be taught in a little more detail, as they will soon need to understand borrowing for mortgages, financing further studies, and maybe as a helping hand when starting out in a career. Explain to them about credit ratings, as mistakes at 18 could stick with them well into their twenties, scuppering any plans for buying a house or similar. They can do their own credit check (http://www.creditexpert.co.uk/experian-credit-check.aspx) from the age of 18 to see where, if any, problems lie.
Learning to save for what you want is an important part of growing up, but for primary age kids and teenagers alike, this can go against their impulsive nature. Teach young children to save money they have earned doing chores or as pocket money for something they really want, rather than just buying it for them. There are also many board games that are based on currency and saving – why not try one of the versions of Monopoly to teach speculation for accumulation? There’s even a new chip and pin version complete with card machine.
Older teenagers should be taught about different types of savings, and how to get the best out of their nest eggs. Times are hard and the interest rates aren’t great, but there are still good tax options like ISAs to help counter this. Children’s saving accounts historically give good rates, so get your older children researching the best deals online.
While your kids are at home you can provide a roof over their heads, warmth, power and water. Once they leave they will be responsible for all these things, something that can take many by surprise when they first start living by themselves. Explaining to your kids that the things they take for granted do cost money could help in two ways. If kids are aware that the electric, water and gas that they use aren’t free they may use less and save you some money. They will also not be surprised when they move out and the first water bill arrives giving them a fighting chance of looking after themselves financially in the real world.
Encourage kids to take steps to conserve energy and resources, to save money and help towards saving the environment too.
School will equip your kids with all the education they need to get a job and become good contributing members of society. It is down to us as parents to educate them about the practical stuff and the ways of the world. By teaching your kids about militant money management when they are still living at home you can save yourself a lot of panicked phone calls about their finances, and might even prevent a withdrawal from the bank of mum and dad in a few years time. No promises though!