By: Tim Bennett
22.11.2018
Before your children fly the nest, here’s how to make sure they are equipped to manage their own money says Tim Bennett in his latest video.
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Top money tips for children leaving home
Autumn sees the mass exodus of many young people, who finished school at the start of the summer in most cases, from their homes and home towns to university, polytechnics or apprenticeships. So, what can parents do to help them when it comes to surviving the financial challenges that come with flying the nest? Here are six tips.
Whilst something of a cliché, these are wise words when it comes to money management. Young people need to avoid being guided by others, who may have more money than them, or be prepared to borrow it. The sooner they can work out how to be happy without borrowing and spending, the better.
Start budgeting
Whilst not the most exciting thing to be doing in your teens, budgeting is vital for anyone trying to keep their spending under control so that they can save that all-important home deposit, or just ensure that student debt doesn’t spiral out of control while they are studying. This is a big topic that I cover in more detail elsewhere, so for now here are three things to think about;
Get to grips with debt
Although some debt is inevitable for many young people, managing it is crucial. The faster young people realise that borrowed money is actually the route to financial misery, rather than freedom, the better. Make sure your children understand the difference between debt they probably can’t avoid and debt they can and then focus on keeping the former under control, both in terms of the amount and the cost of servicing it (interest).
Master the detail
These days small print is a fact of life. Just about everything we need to live, whether the roof over our heads, access to utilities or our mobile devices, some with reams of it. Rather than avoiding it, or running scared of it, get your children use to dealing with it so that they don’t get caught out by signing something they will later regret.
Start saving
The sooner young people start tucking money away, the better for their long-term wealth and well-being. So, make sure they understand the power of an invested pound (compounding) and how it delivers growth over time. Grasping that is the key to them being motivated enough to start saving.
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