As you guys all know, I’m a mum of three, and Greater London is where we call home. Now, if there’s anywhere in the country more expensive than raising three children than the Big Smoke I’d love to know! Don’t believe me? I recently read that the average monthly rent in London is double that of Paris. Yes, Paris!
So…. Where am I going with all of this? I’ve come to the conclusion that my children must learn to value money as a limited resource, because if they’re to make a go of it themselves one day, they’ll need to make every penny count, and we can help them learn how to manage their finances as they grow up.
Open a Junior ISA
Opening a Junior ISA for each of your children is a great idea for a couple of reasons. I’ve discovered that unlike other savings options (such as Child Trust Funds), a Junior ISA carries over into adulthood, retaining the tax free saving benefits beyond the age of 18. Just think what they could choose to do with the products of a savings account that you’ve been paying into for perhaps more than a decade. A car? Tuition fees? Getting onto the property ladder, perhaps? Speak to your children and find out what really motivates them. Get them involved in the savings process. Get them geared up for later life. Whatever they choose to do with the lump sum, the point is that they will have that option, where otherwise, without an ISA quietly growing their cash for all those years, they would have to go without. Check out this website for more info on Junior ISAs.
Yearly Piggy Bank (under 7 years old)
This one is a slow burner. Saving is supposed to go wrong a few times. But that’s fine. Here’s the basic idea. Through the use of a piggy bank, have your child save every penny earned from birthdays and Christmases etc. with the aim of saving for a special purchase of their choosing. Almost without fail, they will pick something that they won’t be interested in two minutes after getting it home, unboxing it, and realising it’s nothing more than a plastic toy robot that doesn’t even have bluetooth or wifi. As the old saying goes, if you can’t be good, be an example. That’s exactly the purpose of this plastic toy – you can use it as a warning to make financial decisions. You’ll soon notice a positive change in the form of a preference for more and more practical items. Sports equipment. Computer pad charger stations. Arts and crafts. Your little saver will amaze and astonish you with how sensible they can be when they don’t want to waste their own money again.
Banks Savings (7+ years old)
Kids over 7 might think of piggy banks as too babyish? Plus, most high street banks will offer children’s accounts from the age of 7. This is good news, because a weekly trip to the bank to pay in pocket money can be an excellent way to teach children to keep track of their money and make smart choices about spending it (after all that leg work to save it up, they’re unlikely to want to waste it in a hurry!).