Five life lessons to teach your kids about money

Remember when your parents told you ‘money doesn’t grow on trees’ or that ‘every penny counts’?

Well, as a parent or grandparent now yourself, it’s time to do your duty and let your children and grandchildren in on a few tips that will help them navigate their way through the world of money.  

Here are five financial tips to pass on.  

1. Save for a rainy day

If anything, the pandemic has shown us that being prepared for ‘anything’ is something more of us could well have done with.  

Recent research by Fidelity has shown that the pandemic timeframe was particularly difficult for young people, suggesting that young adults are most likely to be worried about their financial position due to COVID-19.  

Today’s school-age youngsters need to know that having something set aside for tougher times is a good idea.  None of us knows what life could throw at us, least of all financially, so it always pays to have something to fall back on.

2. Don’t expect anything to be handed to you on a plate

Depending on where you live and if your country of residence has a state pension, you may be subject to ongoing changes in state legislation. In order to achieve financial security later in life, it’s important to make sure you fill the gap by contributing money in addition to what the government may provide.  

3. All those little things add up

It’s important to be aware of how all of the little expenses in our daily lives really add up. That daily fancy drink, the magazine that arrives through your letterbox each month and all those little ‘pick me ups’ we treat ourselves to can surprisingly add up. If any of us were to keep tabs of where every small amount spent went in a month, we’d probably be surprised at how much we effectively throw away on unnecessary spending. Small sums really do add up and cutting out these tiny expenses will make the difference in the long term.  

4. Seize the day

There’s never a wrong time to save some money. If your child thinks they can’t afford to save, tell them to think again. If they think they’re too young to start a pension, tell them you’re never too young to start saving for your retirement.

In fact, time is your friend when it comes to building up your financial security and time is most definitely on the younger generations’ side. The sooner they start saving even the smallest increments, the better chance they have of making their money grow over time.  

5. Look after the coins

While the coins may not buy nearly anywhere as near as much as they used to, save them up and you can soon collect a decent sum of money.

Teach your children to develop a savings habit and they’ll see how quickly those coins can turn into something more substantial. Encourage them to set up a standing order that goes out of their account every pay day. It doesn’t have to be much and will start to go largely unnoticed, though it will add up nicely, thanks to the power of compounding.