Wouldn’t it be wonderful to be able to forget all about money and just get on with enjoying life?
That’s how most of us felt when we were young – and it’s probably not very different to your own children’s attitude towards financial matters. Regrettably, things that may seem irrelevant and distant when they are still at school – tuition fees, housing costs, household bills, and insurance – take on a whole new importance when they reach adulthood.
All young people will be able to access credit when they reach 18 and the majority of those entering higher education will need a Student Loan. Young people who go straight into jobs or training might want to start saving for their future, perhaps for their first car or home. Those who are living independently might need help with housing costs and young parents with childcare costs.
Suddenly, the ability to manage their incomings and outgoings – and to know where to go for financial advice or even emergency financial support – becomes essential.
Unfortunately, bad financial decisions taken as a young adult can have a long-term impact, potentially leading to debt, poverty, homelessness and mental health issues.
If the worst happens and your child’s debt problem is spiralling out of control, encourage them to seek advice at the first opportunity as delaying things will only make the situation worse.
Financial education has been an important part of the school curriculum in Wales for several years. The aim is to teach children and young people how to better manage their finances when they reach adulthood and to make informed decisions about spending, saving and borrowing.
This learning begins early (at Key Stage 2) and continues until the young person leaves school. By then, most young people will understand:
- how to manage their money
- their rights as consumers
- the importance of planning for their financial future, e.g. buying a house, getting married
- how to access financial advice.
From spring 2018, children aged 8-11 years in some areas will start learning about tax and where the money comes from to pay for their school, the police, roads and transport and the NHS.
How to help
Children learn from the people around them and helping your child to understand how to save and handle money is one of the most important things you can do to ensure their future well-being.
Start with pocket money, perhaps paying children to carry out easy household tasks, like washing the car or cleaning out the rabbit cage. Persuade them to save some of their birthday or Christmas money in a savings account. Get older children to save up for a big item or concert tickets, maybe going halves with them.
Remind children that all debts must be repaid, no matter how small or who lent them the money.
The Money Advice Service sets parents some tasks to help younger children and teenagers learn to manage their own money.
Money for life helps 16-25 year olds with money worries. There are forums and one-to-one online support.
Childline counsellors can help children and young people with money worries. Call: 0800 1111.
Money Made Clear Wales explains financial matters including loans and borrowing, bank accounts and financial emergencies in simple terms.
Stepchange offers free advice to anyone who is in debt.