Millions of us in the UK are worried about our finances, and rightfully so. The meteoric rise in household costs has had profound impacts for most families, and demonstrated once again the sheer importance of financial literacy in the modern world.
As a parent, financial literacy will not be the first thing you think about teaching your children. But it is an important topic and an important one to broach early to instil the best possible habits. How might you do so?
Start Young
While there are certainly some complexities to learning about money and general financial literacy, the concept of currency itself is not a difficult one to grasp. The sooner you start your child with a basic understanding of money and value, the sooner you can move on to more complex subjects - and the more confident your child will be with onboarding these same concepts.
You don't even need to use money to start this journey. A common mistake made here is the attempt to use coins, with their differing values, before a child has even learned to count to ten. Instead, you can role-play the buying of things with blocks or balls, demonstrating the role of currency and the permanence of spending. Eventually, with an understanding of maths and experience in shops with you, the basic workings of money will click.
Piggy Bank
When your child is more lucidly aware of the role of money in the world, even if the only direct relation they have is the spending of money at supermarkets, you can start to introduce the concept of them owning money. This would naturally start with the gifting of a piggy bank, which is also a great visual learning aid for the general concept of saving.
After a year or so of utilising the piggy bank, and allowing your child to make decisions themselves as to whether they save or spend, you can introduce them to the next level: bank account ownership. Starting them with a children-friendly savings account is a great introduction to modern banking and a lesson in its own right.
A Trip to the Shops
Going to the shops will not be a novel experience for your child, but being in charge at the shops certainly will be! If they have saved up a decent amount in their piggy bank, you might take them to make their first ever purchase. This is a great teaching moment, allowing them to get familiar with the process and understand the basic skills required to purchase an item. If they don't know quite what they want, this can also be a teaching moment for spending within one's means.
Lead By Example
Finally, a small but critical point: in order to instil positive money skills in your child, you need to be prepared to lead by example. This means practising what you preach and maintaining sensibility in your own approach to saving and expenditure. In being the right role model, you can make teaching your child the value of money a breeze.
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