2 minute read
Education News
from SE22 April 2022
by SE Magazines
Understanding Money Matters
Education News from Alleyn's | www.alleyns.org.uk
Andrew Robertson, Head of Economics at Alleyn’s, tells us why your child is never too young to start developing an understanding of money and how we can go about getting our children thinking about finances. Knowing how finances work is an important part of living as an adult. Eventually, we all need to understand how interest rates, mortgages, credit cards and loans work, so the sooner you can introduce the basic concepts to your child the more confident they will be as they enter adulthood. Of course, you don’t need to talk about compound interest with your toddler, so here is a guide to what to introduce and when:
Pre-schoolers
Pre-schoolers will start to develop a concept of money. You can help your child recognise different coins by their colour and shape and introduce the concept of different values, so an ice-cream costs less than a toy. Explain that money is finite and needs to be kept safe.
Infant-aged children
Research shows that adults who manage their money well come from families who talked about money, gave their children pocket money for (age appropriate) jobs and some responsibility for spending at a young age. Set up a weekly pocket money allowance and give your child their first money box. Give them different coins within that allowance and help them to add up what they have saved over time. Explain the difference between ‘needs’ and ‘wants’ and that saving money helps them to buy the things they want.
Juniors
As your child gets older introduce the concept of paying for things without cash, such as with a debit card or using online payments. There are prepaid debit cards, such as GoHenry, which come with an app that can help you track (and control!) what your child is spending. Children as young as six can use these cards and you can adjust the controls to give them more independence as they get older.
Teenagers
Your teenager is likely to have greater – and more costly! – aspirations as they look to the future. You can help them by: Including costs in their regular spending allowance to spend on essentials such as fares and lunches, for example, to encourage more responsibility for their money and to learn how to budget. There are budgeting tools in some of the prepaid card apps to help them, or you can show them how to put their spending onto a spreadsheet! Encouraging them to earn money by getting a part-time job, so that they can have a taste of financial independence. Your teen might begin to be curious about household finances so explain to them, in simple terms, how you manage the finances at home. Finally, have conversations about planning for their future finances, such as university loans or saving for the deposit on their first flat. Managing money is a crucial life skill so start giving your child the tools they will need early!