By saving money at a young age, kids are able to put aside funds that may help them in the future, that may gradually add up to a significant amount.
Today, one in five young adults are relying on their parents to help make rental payments, while others are making the move back home in adulthood to save money for a house deposit. While the Bank of Mum and Dad can be helpful in an emergency, it might help to think about how to really help the next generation to prevent them from getting into these tricky financial situations.
Introducing simple finance basics from childhood, can help youngsters to familiarise themselves with money, learn simple savings techniques to adopt good spending habits, and help to set themselves up for what they want to achieve in life. Here’s why.
Introduce them to banking
Learn the value of money
In a tap-and-go society where money is rarely physically exchanged and quicker to spend, it is important to educate young people about the value of money. By including your kids so that they see how you spend money, it will help develop a basic understanding of transactions in the real world, as they grow up in an increasingly digital economy.
Understanding saving techniques
Saving as a child, could set your kids up for a secure future, without needing to move back in with you to save for their first home deposit. So it’s important to introduce them to good saving techniques early on. Teaching them ‘Spend, save, share’ could introduce healthy attitudes to the amount of pocket money they can spend, the amount to put away, plus with a little charity added to raise socially aware adults.
Learning how to budget
Raising your kids with an understanding of what to save or spend is laying the foundations for budgeting in later life. Good budgeting makes being an adult a lot easier. Understanding the balance of income and expenses help to ensure that bills are paid on time and holidays are jetted off to. Taking the time to set a weekly pocket money budget, could be worth more to your kids than you may think in their adult life.
Get them started with a savings account
To introduce your children to the world of banking, you may want to explore what a kids bank account can offer, and visit your local branch to open an account.
Saving is a skill that lasts a lifetime, and getting them into good habits now, will help set them up for success.