A recent Young Person’s Money Index report confirms that 81% of young people are worried about their financial situation, with nearly three-quarters (72%) of teenagers asking for more financial lessons in school.
The latest index marks a 14% rise compared to last year and the highest figure since the report first posed the question in 2016.
The continued economic fallout from the Covid pandemic, scam fears, and the current cost of living crisis are all said to be factors.
So how worried are your grandchildren about money, and what can you do to help them feel more financially stable?
Keep reading to find out.
More than half of 15- to 18-year-olds have already been targeted by scammers
The Young Person’s Money Index looked at young people’s relationship with their finances and found increased anxiety, as well as an acknowledged lack of understanding.
Worryingly, even at this young age, scams are a constant worry, with:
- More than 50% confirming they have already been approached by scammers
- 12% having been asked for their PINs
- 8% having had a credit or debit card cloned or stolen.
Attempted frauds tend to be phone phishing scams, with fraudsters purporting to be from a young person’s bank or HMRC and requesting bank details.
Two-thirds (67%) of the 2,000 respondents aged between 15 and 18 confirmed that the coronavirus pandemic had made them more anxious about money.
Young people are looking to schools to provide a more comprehensive financial education
The report found that financial education in schools is increasing, with 73% of respondents confirming their school provided some kind of money lessons, up from 63% the previous year. And yet 85% of 17- to 18-year-olds want more financial education.
The main areas where greater knowledge is needed, according to those questioned, were around the practicalities of money management, including:
- Budgeting
- Debt management
- Tax
- Different financial products such as mortgages, pensions, loans, and credit cards.
5 simple lessons you can teach your grandchildren now
1. The value of money
The first lesson to instil in your children or grandchildren is the value of money and the sense of pride and independence that comes from buying something they have saved up for.
For younger children, you might start by paying pocket money for jobs done around the house. Ensure that your grandchild is the one to decide how the money is spent.
As children get older, Saturday jobs might yield greater income to pay for mobile phone bills or days out with friends.
Financial attitudes are formed early, so by helping a child to develop a strong sense of the value of money, you might also be helping them to develop a lifelong work ethic.
2. Budgeting
Once your child or grandchild has earned and saved their money, they must understand the basics of budgeting.
A weekly magazine might be a good way to start the process, collecting a single issue each week and then budgeting with what remains.
As children enter their teenage years, the list of products and activities battling for their funds will likely increase. Encouraging good budgeting habits early is key.
3. Debt management
Budgeting issues could lead to your child or grandchild finding themselves in debt. Be sure to teach them about the difference between “good” and “bad” debt. This might be the difference between a mortgage to buy a first home and provide financial security, and a high-interest credit card used to make unaffordable purchases that will cost even more in the long term.
You might start by charging interest on loans you make, before moving on to explaining how overdrafts and credit cards work.
4. Why save for the future?
An emergency fund is a key part of your child’s financial stability so they mustn’t be simply saving towards a purchase and then starting again from scratch.
If your child proves adept at saving, you might consider introducing them to investment as they get older.
Understanding the risk versus returns of a Junior Stocks and Shares ISA, for example, could be a great way to teach valuable lessons while giving your grandchild a comfortable start in life.
5. Set a good example
A person’s attitudes to money and risk are formed from a young age, so teaching the right lessons early is key.
That means setting a good example by making sure you follow your own advice. It also means talking about money openly.
Money remains the main cause of arguments between adult couples. The stigma around discussions of money matters could lead to problems in later life if financial struggles are hidden and communication doesn’t come easily.
Get in touch
Hartsfield Planning can help you teach the next generation to understand money matters and stay in control of their finances. If you would like to discuss any aspect of your and your child’s long-term plans, please get in touch and find out how our team of expert planners can help.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.