Teaching children about money is one of the those universal goals that I suspect every parent has! We all want out children to learn good healthy money habits. As parents, we want the best for our children.
I have two children, aged 5 and 7 and we have already started to teach our boys about financial education and money. I wrote about how you can pass on healthy savings habits to your children in an earlier blog.
In this podcast I talk with financial expert Robert Gardner about how you teach your children good savings habits as well as some incredible stats on the power of small amounts invested over time that could see them become mini-millionaires by the time they reach retirement.
Financial education is so important, not just for children but also for grown-ups! I wish I had
Teaching your children about money can start from the moment you interact with your children. Role play games was one of our favourite games to play with the children growing up.
I interviewed Robert Gardner who founded a money education charity called ‘Redstart’ with the aim of teaching 1 million children how to budget save and invest. How incredible is that! He also chairs the children’s education council which started a programme called ‘kickstart money, a nationwide forum to evidence that financial education works from a very young age.
In this podcast you will hear more about:
- What Robert’s experience was growing up in Argentina and how this influenced his money story
- How our environment influences our money experiences growing up
- How our money behaviours start from the age of 7
- Earn it, keep it and grow it
- Easy ways to get your children to save
- Teaching entrepreneurial skills to children to save
- Financial education in schools – what can be done?
- Should teachers be taught first or parents?
- Addressing the income gap
- How do you teach children about money?
- The Money Matters Game – the fun way to learn
- Game Play – teaching children about scams – ‘Rich Ricky!’
- The implications of not talking to children about money
- Delayed gratification and a simple way to teach children how to save their pocket money
- How powerful compound interest is
- Helping children to feel in control of spending
One of the most incredible insights for me was how powerful compounding interest is. You can listen to this from 41 minutes onwards on the Podcast.
If you were to invest £5 per day from birth to age 10 and then stop, you could accumulate an amount potentially worth up to £1 million with the power of compound interest. Obviously, there is no guarantee here as this is based on average performance over that period from the stock-market but how incredible is the potential!
Rob talks about the rule of 71. Here it is in a nutshell:
The Rule of 71 – How long would it take to double your money?
You take the rate of interest and ask ‘how many years would it take to double my money?’ If you were earning 7% per year, what that tells you is that if you take 71 and divide it by 7 you get 10. So every 10 years your money will double.
If you invested £5 per day into a children’s pension (also known in the market as a Junior SIPP), with the free tax relief from the government, from birth to the age of 10 and then stopped, your child could have over £1 million invested by the time they retire.
Some of you may be thinking, £5 per day is a lot of money! If you change this to 50p per day, they would have £100,000 by the time they are 65. You can read more about Rob’s Daily Mail article here.
I have written more about how you can help your child to become mini- millionaires here.
“Children learn their money saving habits by the age of seven so it’s imperative for us as parents to teach our kids the important lessons – how and why to budget and save – as early as possible. In today’s world of instant gratification children naturally want things right away without thinking about what this means in the long term. We need to instigate those crucial conversations early on, and so this immersive game will open up a dialogue between parent and child, and gives kids the opportunity to get to grips with the basics of finance – whilst having fun of course!”
Robert Gardner – About ‘Silly Monkeys Card Game’ – Available to buy now
I hope you enjoy listening to the Podcast. Here are all the resources mentioned in the show.
Rob’s book – ‘Save Your Acorns’ Children’s book – https://amzn.to/2RU60JI
Redstart Charity– Planting the seed for the financial education of young people
Proceeds from the game will be donated to help other children around the UK be educated about financial literacy
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