5 MONEY CHATS TO HAVE WITH KIDS
According to the Money Advice Service, habits with money are formed by the age of seven.
With average household savings at a record low [i] and nearly one-in-three adults in England and Northern Ireland (NI) unable to work out the correct change from a shopping trip [ii] , teaching children and young people about money is more important than ever. You might think that the children in your life are learning about money at school, but just 40% of children aged 7–17 are learning about how to manage money whilst in education.[iii]
Does your seven year old know the difference between things they want and things they need? Does your 16 year old have a grasp of what’s on their payslip? We’ve put together a short guide to help you have relevant and useful conversations with the children and young people in your life about money.
Here’s our quick guide to five things we think children and young people should know about money, and what you can do to help them:
By the age of 7… children should know the difference between wants and needs
Understanding the differences between wants and needs is a good place to start and can help children understand why they can’t have everything!
By the age of 11… children should be able to create and understand a basic budget
As children grow older they have more opportunity to make choices on how to spend money. Budgeting is a crucial skill when planning how and what to use money for.
By the age of 14… young teens should understand the basics of credit and debt
Understanding credit and debt becomes increasingly important as kids move from handling cash to moving numbers around on a screen and buying things online. Four in ten young people aged 7-17 have paid for products or services online, many without the permission or knowledge of their parents.[iii]
By the age of 16… teens should be able to read a payslip
Payslips can be confusing for many of us. By the age of 16 many teens have started working part-time, so understanding a payslip means that they can independently check it and understand the difference between salary and take home pay. It also provides a useful intro to tax and National Insurance.
By the age of 19… young adults should understand the basics of pensions
Retirement might seem a long time off for a 19 year old, but getting a good understanding of pensions now will stand these young adults in good stead for the future.
We’re making a difference in schools
We take the financial education of the next generation seriously at YBS, so we are doing something about it. Money Minds is an innovative financial education programme developed to teach children and young people about money. The Money Minds sessions are delivered free of charge by YBS colleagues in schools. All of our workshops are designed to fit in a one hour time slot to complement the curriculum from age 5-19.
Since 2015, our colleagues have taught over 20,000 children and young people about all of the above topics and more.
To find out more about our new savings accounts for children, click here
[i] Source: Office of National Statistics, Household Savings Ratio: 3.8% 2018, Q3 compared with 3.6 1963, Q2.
[iii] Financial Capability of Children, Young People and their Parents in the UK (2016) - Money Advice Service