Around this point in the summer holidays, it tends to dawn on parents that the new term is just around the corner. They may focus on the immediate panic of discovering the kids have grown out of everything over the summer, but in the maelstrom it’s also worth taking a step back and considering the opportunities the new term brings – not just for their schooling, but also for their financial education.
Each new school year presents you with an opportunity to focus on just one thing to build your child’s knowledge gradually and carefully so that by the time they finish school, they’re ready for the adult money world. Clearly there are no hard and fast rules, and every child learns at different ages and stages, so think of this as a rough outline of things you can consider.
Reception: If you haven’t already given your kids pocket money, this could be a good time to start. It gives them the chance to start making some decisions around what they spend their money on, and will reduce the pester power you’re subjected to.
Read more: How to find the weak link in your finances
Year 2: Introduce them to saving, and open a child’s account for them. When they’re seven, they may be able to pay money in and take it out themselves. There are a few ways you can try to encourage them to build a savings habit. Have conversations about things they might want to save for and consider offering to match any money they put into their savings account.
Year 3: Some people will get their children to earn their pocket money by doing jobs around the house. Others will discuss the idea of working and earning money, so they start to understand the role it will play in their lives.
Year 4: Based on your experience of their approach to finance so far, you can chat to them about emotions and money. By this stage, you will have seen the habits they’ve fallen into, whether they tend to spend without thinking, or worry too much about spending choices. You can encourage them to think more carefully about this sort of thing.
Year 5: They’re likely to be exposed to fads by this age, either in the playground or through social media and influencers – or both. You may want them to join in with their friends, but also talk to them about the phenomenon and get them to consider where value for money fits into their decisions.
Year 6: At this stage they will be familiar with brands and companies that are important to them, so you can discuss these companies and the fact that they could own a share of them. If they have a Junior ISA, it’s a great way to explore the subject together.
Read More: A year-by-year guide to teaching your kids to manage their money
