Do you talk to your children about money, and do you give them financial advice?
Chances are you don’t, since recent studies have shown that only 36% of adults in the UK feel qualified to discuss and give advice on money to their children.
The children, on the other hand, long for a guiding hand – more than 70 percent of children polled in a study said they would like for their parents to give them financial advice, and teach them about managing money.
The study was conducted by NatWest bank earlier this year, and in total interviewed over 50,000 teenagers across the UK.
Andrew Cave, of NatWest and RBS Community Affairs commented on the study, saying that it is clear that children desire to learn more about finances and managing money, and that they instinctively look to their parents for guidance. However, he went on to say, lots of adults do not feel comfortable discussing matters like that with their children, and less than 20 percent of adults polled could confidently describe what an APR is.
Because of this problem highlighted by the study, NatWest and many others are now calling on schools to better educate children about finances and money, so that every child will leave school able to make more informed financial decisions for their future.
But there are a lot of things parents can do at home to help teach their children about finances and money. One of the most important lessons to teach children is the value of savings, and teaching them responsibility. For example, in many situations it is better to have patience, save money, and get what you want later, rather than borrowing money on a credit card to get what you want right now. Avoiding impulse purchases and establishing a culture of saving is the most important thing to teach children when it comes to managing their money.
One of the best ways to get children involved in savings early and encourage them to contribute is through a Junior ISA. It is an account which lets the parents deposit up to £3,600 per year, and where all the earnings from the account such as interest accrued is received tax-free. One thing many parents have adopted is a system where they match their child’s contributions to their own savings. For example, if the child is encouraged to deposit some of his or her money, gotten from allowance or even better from doing odd jobs for friends and family or around the neighborhood, the parents can match his or her contributions to the savings account.
You can also check out how the savings are growing and compare accounts regularly together. Many accounts have a higher interest rate for a certain period of time or until a certain date, and if you (and your child!) are involved savers, you can take advantage of those offers and move on to greener grazing grounds once the special deal is over.
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