Money skills by age
The current state of the world has got a lot of us worrying about our circumstances. With just under a third of people in the UK with less than £1,500 in the bank and 15% of the population with no savings at all to cover an emergency or unexpected bill, money is a big concern for thousands.
Many of us may be wishing that we'd been taught financial education at school or that our parents had given us better skills.
The good news is that it's not too late to educate yourself to be more organised and budget better while also sowing the seeds of financial awareness in your children or other youngsters in your life. Here are a few things you can do:
1. Lead by example
It's crucial to teach youngsters that money plays a big part in our lives and that managing it responsibly can save a lot of heartache. Remember that your behaviour influences how your children view the world whether it's your opinions, what counts for good manners in your home or your money skills. It's easier said than done, but if you approach your own finances in a calm and organised way, the young people in your care may absorb the message that this is the way they should manage money too.
2. Starting early
Providing pocket money is one way to teach youngsters about managing finances. You could help them understand the value of money and make the connection between work and reward by maybe encouraging them to earn their pocket money. This could involve doing chores or taking on responsibilities suitable for their age such as walking the dog or helping to tidy the garage.
3. Talking about budgets
To help youngsters understand how to budget, talk to them about how to split their money into chunks and think about whether they want to spend it all as they get it or put some aside to save for later.
If they receive £2, you could suggest that they only spend half now and put £1 in a piggy bank for something they want but can't afford immediately. This could show them that they need to be a bit patient and save for the bigger things they want in life.
You can also label different piggy banks for them to easily see what's available to spend on fun things now and what they need to put aside to save for a future purchase.
4. Learning from mistakes
As long as you're dealing with small amounts of cash that your household can afford, allow your children to make their own mistakes when it comes to how they spend their pocket money.
Realising that we may have bought something that wasn't really what we wanted but just part of a desire to spend what we've got right now, is something most of us have done. We all need to learn that a short-term spending buzz isn't always that gratifying in the long run.
It's essential that you allow young people to make their own choices and deal with the consequences of their actions.
You may also want to discuss money management by making it relevant to them. For example, if they want to buy a toy that costs £10, this means they'll have to clean their room every day for 10 days or do the dishes on at least two occasions.
Hopefully, if they then make a bad spending decision and experience the negative consequences first-hand, they'll learn to think twice about what they had to do to earn their money and be a bit smarter about spending it in the future.
And maybe they'll also develop a lifelong habit of saving for what they really want or might need for a rainy day.
The important thing is to start having those conversations with children about money as soon as they're able to understand that things need to be paid for. So Talk Money to your kids, and Talk Money with your trusted friends, family and charities to help yourself and the generations to come.