Take advantage of a captive audience for financial advice

Homeschooling the kids is just one of the many tough challenges families have had to get to grips with during the coronavirus pandemic.

The piggy bank should be the first stop for any child learning about money. Picture: PA

As well as being guided by their child’s school, parents may also seize this opportunity to teach their children some money skills.

Here are some tips from Laura Laidlaw, head of customer communications at Standard Life, for creating a personal finance syllabus for children.

Teach them the value of earning

Many parents choose to pay a sum of pocket money in return for completing chores or to reward good behaviour. It’s a great way for younger kids to get familiar with the value of coins and notes, and having their own hard-earned money can make them feel grown up.

A simple piggy bank or savings jar is a great way for younger ones to watch savings grow. It’s a good time to discuss what they’d like to do with their money and help to create good habits.

You could also introduce the concept of Spend, Save and Give:

 Spend: Your children can spend an agreed portion of their money on whatever they want, maybe a magazine or sweets.

 Save: A second portion is saved – whether it’s for a particular goal or a rainy day.

 Give: You could encourage them to use some of their own money to help others. Awareness days are a great time to discuss donating.

Help them with spending options

For older children, pre-paid debit cards are available, so pocket money can be paid straight from your bank account into theirs.

Cards can give your child some independence when it comes to making choices, but parents can retain a high level of control, including setting limits on how much children can spend and what they can buy. Many also come with a smartphone app, so if your child has a phone, you can track how much money they’ve earned and how much they have spent.

Teach the power of saving

Working towards longer-term saving targets helps teach children that resisting the temptation to spend immediately can lead to bigger rewards.

For older children, you could promise to pay them a bonus if they hit an agreed savings target. For example, if they are saving for a new game that costs £25, say you’ll give them the £5 if they can save £20.

This gives you an opportunity to explain how saving and investing for the long term works, why they might need to do it and how it can help them generate more money in the long run.

Open a savings account

This is a great way to help children understand about earning interest. For the longer term, a Junior Isa may be right if you are comfortable your child can’t access the money before they turn 18. There are cash and stocks and shares options.

To help your children understand some of the basics of how banks work, try the Bank of England’s website (bankofengland.co.uk/knowledgebank/what-do-banks-do).

Build a budget

Keeping track of expenses and learning how to budget is another key element of financial literacy. Older children can write a list of all their monthly money coming in and going out, including subscriptions and money for treats. Try to encourage them to put regular amounts away as savings too, creating a cash buffer for unexpected expenses.

Budgeting is also a perfect way to give your child an overview of their finances and help them achieve their financial goals. It’s a great motivation to seek out ways to keep costs down now to afford something better in the future.

Teach them to stay safe

You may think your children are more tech-savvy than you, but it’s still important to teach them about protecting their information online. Keep an eye on your child’s social media accounts and make sure they know about the dangers of sharing personal information and online scams.