Families across the country are tightening their belts as the cost of living crisis continues.
Many households are trying to find ways of saving cash or cutting down their expenditure. Now financial experts at money.co.uk have put together some tips on how parents can teach children about the value of money from an early age.
Whether it’s through pocket money apps or first bank accounts, there are a number ways youngsters can learn the importance of saving cash. Here, Salman Haqqi, personal finance expert at money.co.uk, provides his advice on opening your child’s first bank account and pocket money apps.
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Why is it important to talk about the best kids’ bank accounts right now?
“Opening a bank account for a child can help them learn to look after their money. A bank account can give children a way to access their money whenever and wherever they are. By opening a bank account for a child, you can:
- Encourage them to save their birthday and Christmas money
- Teach them to check their balance
- Let them have a debit card so that they can spend their money in shops or online
How to choose the right bank account for your child
“Children’s bank accounts have many similarities to standard current accounts but are designed for account holders below 16-18. They usually come with some restrictions on how children can use them – they don’t have overdraft facilities, for instance.
“To help you choose the right bank account for your child, start by choosing an account that has the features you need, for example, the ability to withdraw money if required. Don’t forget to check the age limits and the balance restrictions for each account too.
“To find the best bank account for your child, you can follow these simple steps:
- Compare and review the bank accounts available
- Note the accounts that offer the features you need, such as internet banking or a debit card
- If several accounts fit the bill, look at what extra benefits they offer then apply for the best account for you
How old does a child have to be to open a bank account?
“In most cases, a child has to be at least 11 years old to open their own bank account. Some children’s accounts have a higher minimum age, like 16.
“Usually, a parent will need to be present to set up a bank account for a child unless that child is 16 or over. Some banks offer one account for children and another for teenagers. Some children’s accounts expire once you reach a certain age, usually 18 or 19. The bank usually upgrades the account to a standard adult bank account at that point.”
Why is it important to talk about pocket money apps?
“For many families today, the idea of handing over pocket money to be deposited into a piggy bank has become relatively outdated. However, pocket money can be a great way to teach children about money management, and responsibility. These days many parents have turned to online pocket money apps to pay their children, while also keeping track of their spending habits.”
Are pocket money apps safe and how do they work?
“A pocket money app is a money management tool that allows children to learn about earning, saving and spending money wisely. Intuitive layouts, plus robust security features allow parents to safely manage their children’s pocket money online. While you can set spending limits, a huge benefit for parents is that you can also track your child’s spending within the pocket money apps, often receiving real-time notifications.”
How can pocket money apps help to teach kids about money?
“Pocket money apps are being used by both parents and children to transfer savings and create pocket money tasks. However, they are also being used to teach children about money management through in-built app quizzes, videos and games.”
At what age should you start giving pocket money?
“There are no right or wrong ages when it comes to giving pocket money; decisions will depend on your personal circumstances. Some parents give their children a small allowance from the ages of four or five, to demonstrate the benefits of saving, however, this is not always the case. Whenever you start, it’s important that your child understands basic money truths, including the idea that ‘money doesn’t grow on trees’.”
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