Thursday, 7 March 2019

Money Matters – Teaching Self Sufficiency to Children

Years ago, before I welcomed the first of my three boys into the world, I imagined family life would be endless days of baking cookies, playing in the garden, planting flowers, and doing park activities like riding bikes and feeding the ducks in the sunshine. I still like cookies, garden days, flowers, and bike rides in the park, but sooner or later you start to feel like all the positivity and fun in the world isn't enough. It's a harsh world out there, and teaching your children the invaluable financial lesson of self sufficiency is up there with teaching them to stand up to bullies and to always tell the truth. But what's life without turning everything into an adventure? That's why I've been looking into how you could get your children involved in saving for their future while making things as playful as possible.

Open a Junior ISA

I'll kick things off with a long term nest egg idea that is only going to grow and grow until it hatches into something that will be truly worth the wait. A Junior ISA from Wealthify offers tax free savings, and there's no minimum amount you can put in – you can literally transfer five pounds per week if you'd like. Encourage younger children to think about buying a big castle or a speed boat or a space rocket, and perhaps ask children over the age of 7 to start thinking about what they'd like to be when they grow up. By creating a future world that they want to live in, and by asking them if they'd like to put their pocket money, birthday money, Christmas money etc. towards that dream, you'll teach self sufficiency while having some fantastic conversations about a bright and happy future along the way.

Start a Savings Sheet

Saving every last penny for a rainy day is no fun. Avoid becoming the grinch that stole the joy of a chocolate bar or a new football by starting a savings sheet. You can do this by hand, or if you wish to teach your children about IT, a spreadsheet will work too. Set weekly and monthly savings goals towards treats, and assign pocket money accordingly. The children will see the money building up, and they will enjoy the anticipation as much as you will enjoy watching them become more frugal and thought-out in their choices over what to buy with limited funds.

Create a Cheat List

The ISA covers the long term. The savings sheet covers the mid term. Now let's cover the short term with a cheat list. Have your children create a list of things that they'd like to buy, but tell them they can only dip into their savings sheet funds to buy these cheat items if the item has been on the list for more than a day. This ensures that they will have time to sleep on it. Often, they will change their minds and see the value of keeping their savings untouched.

Do you have any tips for getting children involved in saving?

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