The ABCs Of Finance


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Teaching your child to have a prudent and sensible relationship with money starts early. Children look to their parents for everything when they are particularly young, and while you may not always realise it, they are observing and internalising your behaviours and ideas. This is why it is crucial to model good behaviour for your children in all sorts of situations. For instance, if when they start school they struggle to share with the other children, you do not need to tell them what they’re doing wrong and what they should be doing instead. A more effective way of dealing with the situation is to let your child see you share things with other adults (or children). They will then learn it on their own, as it were. Children are incredibly perceptive and will spot things that you’d perhaps hope they’d miss.


While money is something of an abstract concept, it can sometimes be obvious when someone uses it irresponsibly. Getting into debt may be necessary in some situations but it should not be a habit. This is something that your child could see as being good behaviour, and they may emulate it later in life. This is why it is important to teach them the fundamentals of money management when they are still young.


One particularly important financial decision that every young person needs to consider now is whether they wish to attend university. In 2010, the government raised tuition fees to £9000 and late last year did so again without issuing a press release or acknowledging the raise in any way. This has led some young people to evaluate whether university is right for them. The experience of leaving home and studying for a degree is about more than just money though. The lessons that a young person learns are invaluable, such as independence, self-reliance, organisational skills, and time management. However, some people still see it is a simple financial consideration, or as an investment, to be more specific. The reason for this is that over the course of a graduate’s lifetime, they can expect to earn half a million pounds more than their non-graduate counterparts. This is obviously more than it costs to attend university, so the argument goes that it is a good idea. However, like most things, it is not as simple as that.


The risk of taking on debts as a young person (before you have a full-time job and the prospect of a career) is that you will be kneecapping yourself before you’ve had a chance to get into the game. To get a mortgage, you’ll need a good credit rating. If you are worried about how to get student debt solutions without damaging your credit, you’ve already acknowledged the potential risks of student loans. Your child may not be able to buy a home later in life because a bank will not lend to them when they’ve already got so much debt.


This problem is only compounded by the fact that millennials are already not buying houses (ownership amongst 18-34-year-olds is at a thirty year low). What the situation will be like in ten or twenty years remains to be seen. Making the best decision now is therefore crucial.


About Pepper

I am a single working mom, trying to raise my kid the best way I know how. Join me as I navigate my way through the jungle that is Single Mom-hood, armed with rose-colored glasses and strength of spirit. As pepper adds spice to food, so does my daughter add spice to my life. She makes life no less than…PEPPERRIFIC!

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