We all want our children to grow up safe and protected – and that includes financially. But earlier this month a study from Your Money found that a worrying amount of young people had ‘dangerous gaps’  in their financial knowledge. For top techniques to make sure your children are money savvy, read our guide.

Give Them Pocket Money

Give your children a “wage” each week to spend entirely as they want, provided they behave well and do the basic tasks that you already expect (keeping their room clean, tidying away after themselves etc). But, make it clear that this must cover all their spending, so if they want a new game, they can buy it themselves, and if they want something expensive, they’ll have to save or wait until their birthday etc.

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Learning to be wise with money will be invaluable as they get older.

If they blow all the money on sweets on Tuesday, don’t give in and buy them a new game on Friday, tell them they will have to wait for their next wage. Likewise, if they are naughty on Monday, don’t give them their full pocket money on Sunday, and explain the reasons their money has been docked. This will teach them the importance of self control and long term consequences. It is important that you stick to your guns, however, or this technique will backfire and you will instil the opposite values in them.

Let Them Earn

As they get older, give them the opportunity to earn bonuses on top of their pocket money. They could wash the car, take out the bins all week or vacuum the house to earn extra cash. This will teach them the value of hard work, to start equating cost with working hours (and save you time on household chores).

Budget Together

Let your children help you budget for a purchase that you can all enjoy– perhaps a trip to a theme park, or if you are planning getting pet you can budget for its upkeep. Depending on their age, factor in bills and mortgage and then things that can be cut down on. Make sure the cuts are from everyone – a group effort to be energy efficient to reduce the electric bill, or doing the family shop online together, letting them work out which brands are cheapest, and whether things like buying in bulk will help next week’s saving. Have a goal in mind to save each week, and when you reach your target go and buy the purchase as a family.

Give Interest and Credit

Encourage saving and teach your children about interest. Start up a bank account, or allow them to save with you at home, and find or offer two contrasting deals, set around interest rates, one significantly better than the other. Send them away to research and then tell you which deal they want and why. Let them know if they make any mistakes.

If they need to borrow money, do the same with APR. Use this lesson to warn them about debt and loans, so they know that saving and paying upfront will be cheaper for them in the long run.

Get a Job

Once they are old enough, encourage your child to get a job. If you have been using the exercises above, it will extend their understanding of work and money, and if not it will make them learn quickly. Let them know that having a job will help them long term to build their CV and demonstrate discipline to potential employers, apprenticeship providers or universities later down the line.

Give them an Essential Bill

When they are old enough to get a job, give them an essential bill to pay each month. For most teens, a great one to use is a phone bill, as it also discourages control with spending. This will give them a lesson in real world budgeting and consequences – make sure they know the problems that will arise if they don’t pay the bill. This will also teach them the importance of regular income, and teach them good habits (for example, not quitting until they have another job lined up or savings to keep them afloat while they find something else.

Lead by Example

Perhaps the most difficult task for some people, but all the above will be fruitless if you regularly demonstrate bad habits with your money or work. Impulse buying, being late, or complaining about your job will all influence your child and their attitude.