While the pandemic has affected the financial well-being of so many families, the good news is that parents are having more conversations with their children about money.
According to T. Rowe Price’s 13th Annual Parents, Kids &Money Survey, “parents feel an increased urgency in a need to have money discussions with kids.”
Research suggests; children who have had frequent money talks with their parents are better positioned for financial responsibility as adults. And we couldn’t agree more; however, we also realize that it’s easier said than done.
So, if we were tasked with prioritising money lessons to learn from a young age in Ireland, here are eight we would recommend:
- There’s a difference between things you need and things you want
No-one is doubting the need for money. But how often do we see children asking their parents for this year’s must-have toy, game or gadget at the risk of getting refused?
Most of us would agree that there are some things you just don’t need to spend money on. While not necessary, sometimes things like toys, games and gadgets make a great excuse to do something fun as a family, where money isn’t even part of the equation.
- A goal without a plan is just a wish
It’s great to save up for a new PlayStation or a nice pair of trainers, but what happens when you’ve saved the money and there’s nothing on your horizon that you really want?
When it comes to saving for something in particular, writing down a list of things to buy, along with their costs is one way of staying focused.There’s nothing worse than saving up for something only to find out it’s no longer available, or the price has increased.
- Money doesn’t grow on trees
At primary school every child is introduced to the concept of money through play, like naming coins and drawing pictures of their home. But sadly this doesn’t last long enough if parents don’t keep reinforcing this lesson.
Even if they’re too young to understand the concept of money, it’s important to set a good example by not getting caught up in flashy purchases. That is unless you’ve actually got the money to pay for them! There are many ways you can start this conversation by talking about what things cost and sharing your favourite money saving tips.
- Save for a rainy day
It’s great to get into the habit of saving money early on, and there’s no better time than right now while they’re still young and impressionable.
Even if it takes months or years of saving, by starting early, you can ensure that you’ll be able to buy the things they really want, while also teaching them how to stick with something.
- A penny saved is a penny earned
With inflation at its highest level in almost six years it’s more important than ever that young people are aware of the impact of interest rates on their money.
As interest rates rise, so do savings accounts and loans, which means you’ll end up getting less for your money.
- Money is made to be spent
Spending money is very different from wasting it. By being smart with your cash, you can buy more for less.
It’s important to set yourself a budget and stick to it so you have the freedom to spend some of what you’ve saved on things that matter to you. Never borrow beyond your means
When it comes to borrowing money, a credit card can be a fantastic invention as long as it’s used responsibly. However, if not managed properly, debt can quickly escalate out of control and have a negative impact on your future plans.
- Investing in yourself could be the best investment you’ll ever make
The best investment of all is in yourself. It’s common knowledge that the more education you have, the higher your chances are of finding employment.
With an expected increase in unemployment among young people over the next two years it’s more important than ever that they’re arming themselves with life skills and qualifications to give them a better chance of securing their future.
Education and training need time and money, but they generally result in a beneficial return in terms of lifetime earnings. It’s important for children to understand at an early age that the more expertise you have on how to do something and the better you are at it, the more money you can make.
- The sooner you start investing, the faster your money will grow
As you grow older, the value of your money increases. When you’re young your money may not look like it’s worth much, but if invested in something over time, even small amounts can get bigger and better with time.
Investing is like planting a tree – the longer you do it for, the more likely that tree will grow into a big, strong one that can look after itself.
It’s never too early or late to start your own savings and investment plan.
With the help of Gallivan Financial, you can design your own savings plan that works for you, however little or large.
Our team of experts can help you get started and guide you every step of the way. Contact us today at info@gallivanfinancial.ie to learn more.