Motivating Mum UK

307 people are declared bankrupt every day in the UK, which is equivalent to roughly one person every 5 minutes. Under 25 year olds make up the largest proportion of unemployed people in the UK and undergraduates in England and Wales are now subject to tuition fees and are estimated to rack up on average £27,100 of debt over the course of their degrees (figures from CCS and Credit Action). Not surprisingly therefore just one in five young people on low incomes have £5,000 or more in savings. If they lost their job, only one in five youngsters could make ends meet for more than a month.

These figures don’t make happy reading for parents – now more than ever we have to encourage our children to manage their money sensibly from an early age. Money has to be earned, managed and spent wisely – learning how to do this is a vital life skill.

How can we help our children learn money management? This will depend on their age but below are a few ideas:

• Lead by example: involve children in financial decisions from an early age. Obviously the level of decision depends upon their age but you could start with simple decisions like what to spend their pocket money on, then as they get older move onto more complex issues such as holiday options, household items etc. If you show your children that managing your money properly is important then they are more likely to manage their own money confidently and sensibly.

• Make it fun: young children love playing shops – and what better way to learn about money! From simply learning to identify coins to counting out change, all aspects of money management can be dealt with in one game! There are also endless online games, colouring sheets and board games (think Monopoly!) that teach children about money in every conceivable fun way – it does not need to be dull.

• Saving: from a piggy bank to opening a savings account, children are never too young for you to start teaching them how to save their money. Whether it is a young child saving part of their pocket money for a toy or a teenager saving for a car, they need to know the importance of learning to squirrel money away for future use – and the pleasure of buying something they’ve saved hard for.

• Bank accounts: I’ll never forget the excitement of opening my first ‘supersaver’ account and receiving a cheque book! Things have changed now though and the ability to manage ‘virtual’ money is vital – online banking, withdrawing cash, checking interest rates, setting up standing orders – develop good habits at a young age and managing money will become second nature. Teenagers are permanently glued to their phones – teach them how to use them to manage their money! But remember they also need to be taught the importance of keeping their banking details secure, how to identify if they are making a secure transaction online and watching out for scams.

• Shopping: let your younger children make supervised transactions in real shops so they learn how to add up their purchases and check change. Older children will want to take to the shops with their friends so it is important they learn the basics of having a budget and sticking to it!

• Charity: teach them to make sensible decisions. They are part of a world where everything is not distributed equally and will naturally want to even up this inequality. However it is important to teach them to give wisely (the abandoned puppy advert might look cute but would the money actually go to help the puppy?) and to remind them that money given to charity is then not there to spend on things for themselves!

• Earning: paying younger children to do household chores and encouraging your teenager to take a part-time job all fosters the idea that money does not grow on trees (unfortunately!) and it has to be earned.

Maybe if I planted some it would grow into a money tree??

Money management skills are not to be underestimated. Children who know how to manage their money will grow into adults who are in control of their finances and won’t let their finances control them!