When teaching your child or young adult to save, there is no time like the present to start regardless of their age.
If your child is under 18:
- Open a bank account for them.
2. Put in as little as £10 per month until your child is able to earn pocket money.
3. Pay your child for chores in the house but tell your child that they must put 10% of those earnings into their bank account.
4. Take the child to the bank, show them how it all works and let them hand over their money to place into the bank. If you get them to do this early, it will seem like an adventure. If the child wants to add more of their own pocket money or any money earned, give them a small reward for doing so. A reward chart is a great way to encourage this.
5. Show your child the yearly bank statement so that they can see how well their money is growing.
If your child is working:
- At this point your young adult should have a bank account already, if not, help them to get one.
2. Go through their earnings with them.
3. From their monthly salary, take a small percent for rent. Young adults need to understand the concept of paying bills and paying rent is the most important.
3. Take off the cost of their travel to and from work.
4. Divide the rest by 4 or 5 (depending on the amount of weeks in that coming month).
5. If they are left with say £150 per week, get 4 or 5 envelopes (one for each week of the coming month). Place £100 in each envelope. Leave the rest in the bank.
6. Once your young adult gets used to living off a certain amount per week, at times they may find that they have a little money left over. Encourage them to save it until the end of the month to use it for a treat.
The above is how I learned how to manage my money and it really works!