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Hannah Heslop our Independent Financial Adviser shares her fantastic approach to teaching her children about saving:

It is never too early to teach children the importance of money, particularly in a world where things are so accessible.  I heard this idea a couple of years ago and have used it with my children, Elijah (7) and Otto (4) ever since.

The concept involves my children deciding what they do with the money they receive from their birthdays, pocket money, jobs, and special occasions.  This no expense exercise has opened up so much discussion about priorities and what they want to share, spend or save.  For example:

SHARING – This jar of money is designed to encourage them to think of others and to appreciate the joy of giving.  It isn’t limited, it can be shared with siblings, friends, or those less fortunate.  For example, Children in Need or buying a friend an ice cream.

SPENDING – I don’t believe children would understand money if they didn’t have the option to spend some of it, allowing them to treat themselves and enjoy their purchases is crucial to understating the third jar.

SAVING – Initially this jar didn’t get much action, however, as the process has progressed and the children’s understanding of the need to save for things has increased, the jar gets more attention.  For example, Elijah wanted a Nintendo switch, he was motivated to save more and spend less.  Demonstrating to him, that if he really wants something it is worth waiting for.  He has really learnt about the value of saving and now spends much less on the smaller things he previously chose to spend his money on.

Observing Elijah and Otto thinking about their money and prioritising what they want has been rewarding and reassuring.  As adults we need to learn that we can’t have it all, we have to make decisions on what we can spend and what we are prepared to wait for, this concept is a great foundation for the future.

For more information on saving, spending and sharing your money contact one of our experts, we are based in four different offices Dalston, Dumfries, Penrith and Workington.