These days giving pocket money to children is almost a given. Not only will adding a few pence a week to their piggy bank teach them the importance of money management, but a lot of parents choose to give that cash in reward for helping out around the home.
Well, rather that letting them spend it all without giving it a second thought, why not encourage the savings habit? Do so and you'll be setting them up well for the future, with saving being key to ensure we can all get what we want out of life. Even small amounts can make a difference, so why not get started?
Get them into the savings habit
Chances are, one of the motivations for giving pocket money is to teach your children the importance of budgeting and saving for the future, and they're never too young to start. Even toddlers can benefit from learning to appreciate the value of money – giving them small amounts on a regular basis can be a great way to teach them, and encouraging them to save it rather than spend can ensure they grow into adulthood being responsible with their budget.
There are a number of things you can do to encourage this level of responsibility. You could help them put a savings goal in place, for example, or could teach them that saving small amounts can soon add up and can mean they're able to buy themselves a treat later on. Making it fun by incorporating stickers or stars for each set amount saved could be a great incentive too, and simply specifying it as "saving" so they don't spend it all on penny sweets can help.
Seeing the pennies visually stack up in a piggy bank will of course be ideal, and it'll be exciting for them to see their money grow. But, chances are there'll come a point when it gets too full, and that's when a children's savings account can come in.
Another great way to encourage the art of saving, a lot of children's accounts offer impressive rates of interest so they can see their pocket money start to add up – not to mention it'll give them the chance to earn that interest entirely tax-free if the appropriate forms are filled in.
Better yet, a lot of accounts offer great incentives as well, such as money boxes or book tokens, while junior ISAs could be a great solution for parents that want to build up a nest egg for when the child hits 18.
So, no matter what age you start giving pocket money or how much you choose to give, make sure to encourage the art of money management from a young age and your children can get into the savings habit with ease.
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