MyBnk is kicking off Talk Money – Talk Pensions Week with 10 top tips for parents to break taboos on discussing personal finance.
Running from 18-22 November, the UK awareness initiative, run by the Money and Pensions Service, aims to kickstart conversations on budgeting, banking, saving and pensions.
From London and Scotland to Liverpool, York and Southampton, MyBnk will be supporting the drive to promote and improve financial wellbeing for 7-25 year olds, creating a platform for parents, teachers and youth workers to get involved.
On the frontline we are bringing money to life with financial education workshops for 1,450 young people in 27 schools and youth organisations. Using games and high energy activities we will tackle money mindsets, debt and independent living. Our financial education experts have also come up with ten top icebreaker tips to discuss money matters with your child.
1. Show them the value of it
Young people often want the latest gadgets and gizmos. Try to be firm regarding their needs and wants, so they understand the real cost of day to day living and that money isn’t infinite.
2. Be aware of passing on your money habits
It’s easy to pass on your financial habits and attitudes without realising. Joking about money or talking about it in a negative way can normalise bad financial habits in the next generation, so just be mindful of what you say.
3. Let them spend it
They need to experience spending money and making choices with it in order to understand that once it’s gone, it’s gone – particularly if it’s money they’ve earned.
4. Get them to review it
Reviewing subscriptions, current and savings accounts, and shopping around for the best deal is a great habit for teens to get into. You could even make it into a challenge: who can find the cheapest deal?
5. Save it
Encourage them to think about savings as early as possible. The key to saving is not how much you save but how often – even a small amount every month adds up!
6. Don’t be afraid to talk about it
Recent research shows that Brits find it more difficult to talk about money than mental health. Money shouldn’t be a taboo topic. Having open conversations about finances helps to set teens’ expectations and builds their confidence in discussing financial matters.
7. Let them earn it
Earning money for themselves helps teenagers understand its value in relation to employment. How many hours does that Saturday job take up? And how does that equate to what they spend? Working also exposes them to payslips and tax codes- essential knowledge for later on.
8. Help them to understand student debt
A student loan does not affect a young person’s credit score or ability to get a mortgage like other personal loans do. And repayments are automatically taken as a percentage of their salary, once they start earning above £25,725. This might impact their uni decisions if they’re at that critical stage in life. Watch this video from financial expert Martin Lewis to make sure you understand the system yourself before talking to your child.
9. Budget it
Support them to build confidence in managing their money. Some banking apps provide insights on spending and can help them to understand the difference between their needs and wants. Starling, Monzo, Daily Budget and Yolt are some to consider. Otherwise, a good old-fashioned Excel spreadsheet will do the trick.
10. Understand interest
At some point, everyone will either want to save or borrow money, so helping your teen understand interest and how it affects their wealth is essential. This loan calculator can help illustrate how much borrowing might cost in real terms.