Childhood can be a fun time, full of play and wonder. As a parent, you may want to set aside some of this time to help teach your child how to become a responsible person. While you might focus on manners or etiquette, learning how to be responsible with money can also be important. Generally, the earlier you start discussing smart financial decisions with your child, the sooner they may come to appreciate these lessons. Realistically, this could help to prevent your child from struggling with debt later in life.
One of the simplest ways that you might be able to show your child can be through saving money. Children may find the concept of saving rather dull, especially if there is something they would rather spend their money on. However, seeing their money grow over time, without them needing to do anything with it, could be quite alluring for some young people.
You may have already looked into investment for juniors when they were younger, such as opening an ISA. While you can continue paying into this account, your child may also be able to put some of their pocket money or allowance into it as well. It may be a little disappointing that they cannot yet access it, but watching those numbers increase over the coming years, up until they can make that withdrawal, might be rather exciting.
Your child may also learn a bit more financial responsibility if they are able to see how you manage your own money. This could involve some lengthy discussions, but also require you to open up about the tips and tricks you use to make your money go further. Alongside saving money for a rainy day, you could describe what it is like to pay bills, show a breakdown of your household outgoings, and even show them how you utilise a shopping list to prevent you from impulse purchasing at the grocery store. They may be able to actively get involved with some of this financial planning, especially once they reach the teen years.
Helping your child to avoid gambling can also aid them in keeping on top of their finances in the future. It can be tempting to play the lotto or buy scratchcards, in the hopes of hitting that jackpot. However, the likelihood of this occurring is incredibly small, approximately 1 in 14 million. You may want to explain this to your child, as well as the fact that they are more likely to spend more on tickets and cards than they will reap back in the first place. Gambling addiction is also a possibility, leading to serious money problems. Being honest about the potential consequences of a gambling problem could help your child to avoid partaking in the first place.
As parents, we normally want the best for our children. By teaching them how to manage and use their money, we can help to set them up for success in adulthood.
