Never too young for money management!

By Patrick Goddard, Independent Financial Adviser, Manning and Company

At Manning and Company we talk a lot about planning for the future.  Hopefully you have your own financial future under control (if not, come and talk to us!) - but what about the next generation? 

Of course, if you have dependents it’s important to consider how they would be taken care of, should anything happen to you. 

But what about also equipping them to take care of themselves? 

Are we teaching our children the importance of good financial management from an early age?  And an early age it needs to be; as research indicates that adult financial management habits have been formed by the age of 7!

It may be tempting, particularly when times are hard, to insulate our children from the financial realities of life – such as the cost of everyday items, and not being able to afford certain things.

But this can do children a disservice.  Now, more than ever, children need to learn the value of money and how to make it work for them.

So firstly, encourage children to understand the ideas of spending and saving: that if they spend money today they will not have it to spend it tomorrow, and they must accept the consequences of their choice.

Secondly, encourage them to understand that money does not always come easily.  Gift money is lovely of course – but also allow them the opportunity to learn the value of work through financial rewards for chores.

Thirdly, let them handle real cash and understand its value (this will also help develop numeracy skills in Key Stage 1 children).  Play shops - even better, involve them in the real weekly shop, by recognising prices, and talking about whether something represents good value, and whether it’s a “want” or a “need”.

Fourthly, use technology. There are several apps and websites available with engaging ways to teach young children money management - for example, PktMny, MoneyAsYouGrow.org, and Goldstar Savings.*

Finally, give them the excitement of an account of their own!  It’s a chance to not only make a ‘special occasion’ visit to a bank or building society, but it’s a practical way for them to have something of value and encourage good financial management.

* These websites are included as examples only, and should not be considered as recommended or endorsed by Manning and Company.