Personal finance is just a minefield. That’s something we learn in adulthood and parents regularly wish they’d known that this elusive and bewitching entity ‘cash’ would be so influential when they were younger.
It’s an inconvenient and sometimes unpalatable truth that money dominates life as an adult. It’s so influential that it decides how we’re feeling on any given day – whether we’re in a good mood or a bad mood, whether we feel confident or anxious, whether we are stressed out or blissed out.
We’d all like to think that we’d be the same even if we didn’t have any money put away, but the truth is that savings tend to impact our lives for the better. They take the strain off modern life. Unexpected costs are less of an issue when there’s cash in the bank and we never feel as though we have to refuse social engagements, pass up travel opportunities or avoid entertainment because of the sheer expense.
Family units with savings to fall back on know they can afford to live a little. They can feed and clothe their kids, enjoy a comfortable domestic life and still make plans for the future – because they know how to economise.
And that’s really the issue here. So few people know how to economise properly and the skill involved in saving is too often disregarded. Not being able to do a proper budget or put money aside for a later date is often behind the financial insecurities that continually hound us.
Of course, when we reach adulthood we learn all about the impact of money. All it takes is a few utility bills, rent or mortgage payments, various types of insurance, taxes and the ordinary, day-to-day expense of living a decent life to shock us into a more proactive attitude with relation to economising. But if we’ve not got a good grounding in saving, it can be an uphill struggle.
Adapting to the world of finance
It’s generally agreed upon that the sooner we know about budgets, saving and all the rest, the better, because we can adapt more easily.
Of course, there’s nothing we can do about our own inexperience with relation to money. All we can do is accept that money is suddenly a huge part of our lives and then adapt as best we can. It’s a good idea to take financial planning advice from impartial experts, but it’s then our responsibility to look to our kids and try to make things easier for them when it comes to cash.
Our own frustrations and confusion with economising ought to act as reason enough to get our kids familiar with saving earlier. This is not something that children generally learn about when they are in school because of all the other things that matter in the early stages of education, but it’s something that parents can definitely offer support and instruction in.
What money means
It’s a genuine relief to have children who know the value of money. They are much less demanding and they are able to understand better the dilemmas their parents have to face in terms of making their earnings go further. However, an early education in saving doesn’t just benefit their mums and dads – it benefits them by protecting them from the sheer shock that the real world of money can provide once they enter it.
Can saving be fun?
One of the challenges for parents is to try and make saving interesting, rewarding and engaging for kids. This is actually made possible by the range of children’s savings accounts on the market these days. It’s possible to open accounts for your kids with no minimum age requirement and with savings of as little as £1. This tiny window into the adult world is something kids often relish.
Things to learn
One of the things that all parents notice about their children is their natural inquisitiveness. It’s not necessarily all that difficult to get kids interested at first. There’s no guarantee they’ll retain that initial excitement about seeing their money in a bank account but they get some good grounding in any case.
The question is: what do kids actually learn when they have a savings account? First of all, there are the simple mechanics of withdrawal and deposit. It’s important to get an idea of these things in order to gain confidence when banking.
Then there is all that jargon of money and savings and interest. Kids need to know what these terms mean so that it’s not a completely new language to them when they need to start using it for themselves.
When it comes to interest, children get a really good idea of what happens to their money when it’s safely stowed away in a bank account and that starts to give them big ideas about how they can make sure they make more of their cash in later life.
In today’s very materialistic world, it can’t do any harm for children to understand more about what their parents have to face either.
It’s all about making sure that nothing is foreign to kids when they are finally of an age where they are earning money, spending money and saving money. They need to be familiar with the language of money and with the maths behind it if they are to avoid those worries their parents had to face when they first started out in the real world.
The Nottingham have provided an insight into why children need to know about saving from an early age and the benefits that this can have for them in later life.