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Kids rule at savings school
Dear homeschoolers, you are doing amazing and we don’t think you hear that enough. If you have recently battled with algebra and Pythagoras’ theorem and struggle to see how useful it will prove in your child’s later life then we have the lesson plan just for you. It is never too early to help children understand how much their favourite video game, toy or snack is worth. Creating good savings habits is an art form and eases children from the danger of becoming too reliant on the Bank of Mum and Dad. Below are some easy tips to get you ready for the first day of savings school.

1. Wants versus needs

The best place to start is to help your child understand the key difference between their wants and needs. Explain that needs are the primary basics such as food, clothing, shelter and school supplies and the wants are, essentially, anything extra. Once they understand what their wants are, you can teach them how to save for them.

2. Make them earn it

It’s well known that the most satisfying things we have in life are those we have rightfully earned. A weekly or monthly allowance is a huge privilege for many children and teenagers, so try to give them that confident, “I deserve this” feeling by asking them to complete tasks to ‘earn’ their pocket money. Whether it’s those mundane, regular chores or running small errands - you’ll find that offering a little incentive goes a long way.

3. Put it in a piggy bank

Once your young saver has begun to pile their pound coins, you will need to find a place for their savings to go… For younger children, a piggy bank or money box equivalent is a great place to start. For older pre-teens and young adults under 18, consider a custodial savings account which allows you to oversee their outgoings but gives them the option to own a debit card and withdraw their cash freely, whilst earning interest. 

4. Set up savings goals

Saving feels so much easier when it has a defined purpose. Talk to your child about something they wish to buy, help them work out how long it would take to save up for it and the importance of having patience. Flex your budgeting skills and work together to create a plan including pots for saving, spending and sharing. Often, the “wait” is the trickiest part of saving but plotting out the journey can help young people think ahead and avoid borrowing for impulse buys in the future.

5. Act like a saver, but think like a bank

Our final piece of advice is to illustrate the relationship between your child and their bank (which right now is probably you). If your child is in their early teens and regularly requests money for an expensive item, consider offering them a loan instead. Ensure they understand the timescales for repayment, the concept of interest and the benefits of building reliable credit.

 

Whether you are in the supermarket explaining the biscuit discount offers or charging your Tik-Tok obsessed teenagers a small fee for wi-fi access, there are lots of ways to save as a family. An early introduction to money literacy can often be the cornerstone for raising a financially responsible adult.

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