It’s often said that a British education doesn’t teach us the practical skills that we need later in life. While it’s hard to pin down exactly what these skills are, money is one thing that we all definitely need to learn how to manage.
It’s no wonder that today’s youth spend time on TikTok learning financial skills (as well as innumerable trending dances). But when it comes to developing their monetary habits, their key influence remains closer to home.
According to a survey taken as part of The London Institute of Banking and Finance’s Young Person’s Money Index 2021-22, over half of secondary school students aged 15-18 say that their parents are their main source of financial understanding.
So what are parents to do in order to live up to this responsibility? We’ve written this short guide to answer that question. Read on for our top tips on how to teach your teens about finances.
The earlier that you begin to have conversations with your child about money, the more time that they’ll have to get to grips with the key concepts. By teaching them about how to think about money at a younger age, you’ll give them a greater chance to have clarity around finances during their teenage years.
There’s no limit to how soon you can begin to talk to them about money and how important it is to be financially responsible. Try to do some groundwork before they reach their teenage years and begin to gain a little more freedom financially.
Open a bank account
We best learn new skills by practicing them. That’s why it’s a great idea to open up a bank account for your teen. With their own account, your teen can take responsibility for their spending and saving. This will give them ample practice by the time that they reach adulthood.
You can still achieve a good blend of supervision and independence. Many banks offer teen accounts for this purpose, which will give you joint account-holder status with complete access. This way, you can see how they’re doing.
Talk about risks
Talk to your teenager about how things sometimes go wrong financially. Share your own experiences and explain what you learned from them. This will give your teen a greater bank of experience to draw on when something inevitably goes wrong for them. And by being open with them about how you’ve made mistakes in the past, you will make them feel like they can share theirs with you, rather than hiding them.
What’s your favorite way to teach your teen about money? Tell us what works for you in the comments section!