5 ways to teach children about saving in Global Money Week
This week is Global Money Week, which focuses on a subject we care deeply about: teaching children about money. We asked MyBnk.org, the UK organisers, to provide some helpful tips for parents to help with your financial education endeavours …
Our recent ‘Saving for Children’ survey, which we will share more on very soon, produced lots of interesting results but two of the most striking facts to come out of it were that:
- 77% of 16 to 18-year-olds said they learnt the most about money from their parents.
- 83% of this age group feel there isn’t enough finance education in schools
‘Save today. Safe tomorrow’ is this year’s Global Money Week theme. It’s clear that parents have a vital role to play here and with this in mind, MyBnk.org, Global Money Week’s UK organisers, offer these 5 helpful tips for teaching children about money:
1. Learn to earn
Place a value on work or chores for a reward, then identify savings goals together and agree steps on how your children can reach them.
2. A lesson in family finances
Eighteen year-olds living independently for the first time receive quite a shock when confronted with the realities of managing a household budget. You can demystify this if you sit down and show them your budget and outgoings, demonstrating how you keep the lights on and the fridge full!
3. Understanding wants vs needs
Many think if you understand this difference (and compound interest!) you are set for life. A need is something you can’t live without. A want is something you would like, but not having it won’t cause a real hardship.
Ask your child or grandchild to write down the last five things they spent their money on, or which were bought for them and then discuss these with them to work out which definition applies to each item.
Based on the Money Saving Expert approach, this concept works just as well for young people. Ask your child or grandchild to look at one of their normal expenses, such as a drink, snack or magazine, then multiply this by the frequency (eg 365 for daily expenses or 52 for weekly ones) and compare the total with what they could have had instead such as a new phone, or the beginnings of a savings pot for future use.
5. The art of patience
‘Would you rather have one treat now, or two treats later?’ Delaying gratification – it’s a simple yet effective proposition for parents to put to their children.
Global Money Week resources and competition
There are further opportunities and resources available to help teach children and young adults about money during Global Money Week, which is supported in the UK by Mybnk.org in association with Children and Youth Finance International. The theme this year is ‘Save today. Safe tomorrow’, which is obviously close to our hearts!
London Museum and London Stock Exchange are involved, as well as other organisations: here’s a summary of what’s going on and the resources available, including a competition for 9-18 year olds.
This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.