Since O was born in 2011, hubs and I have saved an amount each month for the kids’ future. As it stands, they will receive the savings when they turn 18 years old and we, as parents, will be encouraging them to use the savings responsibly; for example, towards a deposit on their first house, paying towards University costs, etc. However, we have been considering other ways to help O begin to understand the value of money and how we can begin educating him on financial matters.
Although he’s almost 6 years old, he has little understanding of the value of money. Any pocket money that he has been given by relatives for sweets, he’s chosen to pop into his piggy bank – knowing that the bank of mum and dad will buy him that Kinder Egg when we next visit the post office. In a way, I suppose he knows how to save his own money as he’s spending someone elses!
I love to support local businesses, and I’m honoured that The Cumberland has asked us to take part in spreading the word of the #GrinUpNorth campaign. The Cumberland is proud to be based in Cumbria and, like us residents, knows that it is far from grim up North. There’s so much to see and do here in Cumbria, and the Cumbrian people are some of the friendliest in the world.
At the weekend, we visited the Cockermouth Branch of The Cumberland to discuss how we could begin teaching O about the value of money. We took our appointment with Lisa, the branch manager, who sorted us out with a cuppa tea (much-needed – it was early!) and talked us through the different children’s accounts available. Lisa was so helpful, relating to us on a personal level and made us feel completely at ease talking about, what can be, quite a personal subject. The theme of the #GrinUpNorth campaign shines through in The Cumberland’s staff – valuing local customers and providing a fantastic level of customer service. In fact, their customers are the happiest in the UK, according to research undertaken by Fairer Finance; and I completely understand why as the service we received with Lisa was second to none.
As we were discussing the different accounts, there was one that really caught my eye; the Young Savers account, which is designed to encourage young people to save. Lisa explained that the young person wishing to open an account would attend an appointment with an advisor, with their parent(s) of course, and they would be treated as any other new customer. The young person would be told of everything they need to know about the account; learn about account security and be introduced to the staff and shown around the branch. They would receive a passbook to manage their account and a welcome pack, including a ‘paint your own’ piggy bank, information sheets and stationery.
Lisa explained that parents can agree to upgrade the account to include a debit once the accountholder has reached the age of 13. She also explained how the face-to-face appointment that the young person has with an advisor can be similar to a ‘lesson’ in managing personal finances. Lisa told us of the great work that the Cockermouth branch of The Cumberland are doing with schools; going into classes and educating the children on the realism of being a homeowner. A good example is, if I gave you £500 to furnish your first flat, what would you buy? Most kids will think of an Xbox and a bed, then realise they have nothing left over for a washing machine, pans or a kettle. Who actually knew what council tax was when they were at school? I digress. The point is, the younger we start to teach O how to manage his money, the more prepared he should be when he has his own job and money to manage.
Our discussion with Lisa helped us to figure out how we should approach the subject of finances with O. When he’s a little older, we’ll explain to him that we won’t be buying toys, games and sweets for him anymore. Instead, we’ll be setting up a standing order into a new account for him as pocket-money, with which it is for him to do as he pleases. I think it’s so important to encourage smart financial decisions from a young age – after all, the bank of mum and dad won’t be there forever!
How did you introduce pocket-money for your children? How old were they? How do you teach your children about personal finance?
*This is a collaborative post with The Cumberland, however all words and opinions are our own. Visit their website at www.cumberland.co.uk This article should not be relied upon when making financial decisions. Always obtain financial advice.