Teach kids key cash lessons

Posted on: 02/03/2012

With the current economic situation showing no signs of improving, it seems like we could all use some top tips on how to better manage our personal finances.

One lesson that we should surely have learnt by now however is that – for most – life after education (be it school, college or sixth form) can be a bit of a reality shock.

For the majority of students who fly the nest of financial care provided by their parents in favour of an independent lifestyle, money management is an entirely alien concept and the majority are quick to succumb to the seemingly simple solutions provided by credit cards, overdrafts and, ultimately, bad debt.

We’ve all been through it; that terrifying moment when you attempt to make informed decisions about debit, credit, cheques and balances without really understanding what complex contract you’re entering into.

It’s no surprise then, that there have been a number of recent campaigns targeted at introducing some form of financial education into the core curriculum of Britain’s schools. While progress is (slowly) being made, we here at Cash-is-Cool urge you to take matters into your own hands.

Let’s start teaching some cash-friendly common sense to our children now and hopefully put them on the right track for all future financial decisions.

We’ve put together three top tips that we believe will get early savers off the best start;

1. Spend what you have, not what you WISH you had. Don’t allow your children to pick up bad habits early on and encourage them to keep track of their cash. Cash budgeting is a key skill that can help children to really understand the value of their money – and the importance of knowing where it’s going! Avoiding debit and credit cards encourages basic budgeting, a top technique that many adults are still unable to master!

2. Keep cash for a rainy day. Encouraging your children to start saving with a money box is a really easy way of teaching budgeting skills. Not only can they physically see how much they’re saving but they’ll get a great sense of satisfaction when they find something worthwhile to spend the money on. This is a great saving scheme for adults too and takes away the temptation of “accidentally” spending your savings when out shopping with your cards!

3. Cash is key for the economy. Cash is a really important payment method, a fact that tends to be forgotten by big-name banks and card companies busy promoting the latest in contactless technology. Not only are our notes a representation of our country’s history, they also enable shopkeepers and independent business owners to avoid the whopping 37.1p charge placed on every card transaction (debit cards cost out at 9.2p while an average cash transaction cost retailers just 1.7p in transportation and banking costs). These costs are hitting British retailers hard: whilst credit cards were used in just 10% of all transactions last year, they made up more than 44% of processing cost burden. Get your kids keen on cash from the get-go and you’ll be enabling them to support our struggling stores!

We’d love to hear any of your top tips for financial education – comment below or tweet us @cash_is_cool!

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