When we become parents, we often think of the things we’d like to pass down to our children. Will they have Dad’s hair colour, Granddad’s love of nature or maybe Mum’s artistic flair? How many of us place positive financial behaviours at the top of that list?

When it comes to fostering a positive financial attitude, we believe the earlier you start, the better. Whether you chose to educate your child as to the value of employment with pocket money for tasks undertook or turn birthday gifts of money into a chance to educate them on all things investment, there are many opportunities to instil healthy and proactive financial behaviours in your children.

As Christmas approaches and kindly friends and family give gifts of money, now is the perfect time to teach your tot financial skills that will set them up for life. The spend/ save/ share model is a perfect introduction to investment. The idea is that children split their money into percentages divided between spending, saving and sharing. The percentage for each is up to you but a popular divide is Spend: 50% Save: 40% Share: 10%.

We’ve explained each step for you below.

 

This part of the money is designed to be enjoyed. This can be spent on something they want now, such as sweets, toys, apps etc. If, however, the amount doesn’t cover the item they wish to buy, it could be perfect opportunity to encourage them to place the money in their ‘save’ jar. By allocating a set amount to spend, children will learn the value of money and the relative cost of items.

save label

This section can teach children the benefits of deferred gratification. Whether they are saving for a short-term goal, such as a computer game or new trainers, or a long-term target, such as spending money to take on a family holiday, a larger ‘treat’ such as a games console or, for older children, their first car and driving lessons, setting aside the money will allow them to visually see the steps needed to make these ‘big ticket’ purchases. Understanding that incremental savings can soon add up and will, over time, allow them to purchase desired items/ achieve their goals will stand them in great stead for adulthood.

If you really want to take the opportunity to teach them about smart investments, rather than save the money in a jar, you could encourage your child to open a savings account. There are many child friendly accounts out there, just remember to look for the ones with the best rates rather than the shiniest free gifts!

share label

This portion of the money should be set aside to go towards a good cause. Setting aside a portion of your wage for good causes is a practice undertaken by many religions including Judaism and Islam. Whilst not an ‘essential’ financial habit, it does teach young people the importance of social responsibility and encourages them to look outside of their own needs and wants to those of society as a whole. Take the opportunity to talk to your child about things that matter to them. If they’ve shown a keen interest in nature, why not look for local conservation charities to donate to. You can find a list of local good causes here. If they are a member of a school club or association, perhaps the money could be donated for resources. Supporting the next generation to be socially minded will only be beneficial for themselves and society as a whole in the future.

Get started!

To get started you’ll need 3 clean jars. We’ve made some labels for you to print off and stick on each jar. There’s also a handy form for your child to fill in as they go so they have a ledger of their money.

Download the labels here: Spend, Save, Share labels

Download the ledger here: Spend, Save, Share Diary

So, there we have it- spend/ save/ share! Whether you’re a parent, grandparent, carer, aunty, uncle or anything in between, why not give it a go with the young people in your life and help create the happy, healthy, financial savvy adults of tomorrow, today.