I have a delightful 12 year old daughter and she has just opened her first bank account. I am dreadful with money but I would like to know what I should teach her so that she does not pick up my bad financial habits. Do you have some top tips of things to teach our children so they are wise and responsible with money please?
Hi Louise. Wow, there are so many things I would say to my own younger self had I the chance, so its fantastic to hear your desire to help your daughter onto the right path.
Your daughter is not (yet) working, so for now, the money she sees being spent is your money. I would therefore suggest involving her in the household budget. Be open about decisions you make. And (if you’re brave enough) perhaps also about the impact of your own less than great decisions. You consider yourself ‘dreadful with money’ so, what have you had to sacrifice or miss out on as a result?
If you haven't already, then pocket money in exchange for completing certain tasks or simply passing over control of some of her personal expenditure will also help. The management of phone credit, for example, what is used, and what happens when it runs out. And let her put any savings she makes into that account she’s opened up.
Longer term, however, I have a tip for you both. In ‘The Richest Man in Babylon’ (George Samuel Clason), we are advised to ensure that “a part of all we earn remains ours to keep”. A tenth in fact, if possible. Or as Monica's father in Friends says "10% of your paycheck - where does it go?" (In the bank...)
Starting out with the attitude that you control your expenses and save often creates very positive life long habits. And wealth. Teaching your daughter could also be a great way to start trying to organise the same for your own finances.
Its never too late for us to make a difference to our long term financial health. Good luck, therefore, and happy saving.