Parenthood is a topsy-turvy ride that starts out with the best intentions and ends up being the very best you can manage given a tight budget and no sleep… and anyone who says any different is either lying or following some sort of secret manual! For me, the ‘best intentions’ that we had in mind involved bringing up our children to be fearless and dogged in the pursuit of their dreams. Perhaps we’d have twin astronaut daughters and a son with several Michelin starred restaurants dotted around coastal Italy. Whatever they wanted to do, we’d be there to support them. But there’s one thing we often overlook when thinking about important life lessons. Yes, be fearless. Yes, be focused. Yes, give 100%. But no matter where life takes your little one, they’re going to need money.
Shaping young minds to be sensible with money is perhaps the best support structure you can provide – because when the times comes to fly the coop and make their mark on the world, chances are that they’re going to need a little start-up capital.
Junior ISAs
Don’t worry, you don’t need to be a Wall Street banker in order to master the uncomplicated world of ISAs. First of all, if you really have no idea about what an ISA even is, just think of it as a tax-free savings account that offers competitive interest rates. The best thing about a Junior ISA is that it will automatically convert into an adult ISA upon your child’s 18th birthday, meaning they will continue to benefit from the same tax-free saving protections without a second thought (find out more). This is your chance to ensure that when they’re ready to dip into the fund – be it for school fees, a car, a business idea, etc. – the money is there and ready to go.
Understanding Financial Commitment
School is undeniably brilliant for a child’s development. Still, it is crazy to think that kids learn about Pythagoras and bearings without learning about becoming homeowners. You don’t want to scare kids by introducing them to your money worries. However, there is nothing wrong with teaching them about taxes, the ‘hidden’ lifestyle bills, and related issues. Likewise, a mortgage loan repayment calculator can be used to complete a maths lesson (percentages). It also opens their eyes to the financial elements of buying a home. Naturally, this will be a very handy tool when you are considering the prospect of relocating. Teach them through their early teens and those life commitments will be far less daunting when they eventually fly the nest.
Two Money Jars
Yep. Two money jars. Not one solitary piggy bank, no doubt destined to be unceremoniously smashed open on a rainy day so that the apple of your eye can run wide-eyed into the nearest toy shop and blow upwards of a year’s worth of pocket money on something plastic that will break within two days. Break the mould and opt for double savings jars. Why? Simple. Mark one “Spending” and mark the other one “Savings”. The glory of this idea is that guilt will do all the teaching for you. When the spending jar is empty and all they’ve got to show for it is yesterday’s unloved toy, the value of the savings jar will start to shine brightly in their mind’s eye. Saving means options. Options mean never having to go without. And never going without is a satisfaction that will drive future savings like nothing else.
Off Brand Shopping List
This is a short but sweet tip given to me by a dear friend a long time ago. When fuddling through the weekly shop, involve your children in the decision about what to buy. Compare the difference in price between branded and off-brand goods. Show your children that money can stretch further if you’re willing to make certain concessions. They’ll love pointing out the cheaper options like it’s a game.
**Collaborative post**
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