The UK education system is already very demanding, and outside of the National Curriculum, there isn’t enough time in the day to teach everything that’s needed. As a result, life skills from financial education to writing a CV often get missed. With a poll from YouGov and The Times showing two-thirds of people believe the education system fails to teach kids the right skills, here’s 20 things to teach your kids so they don’t miss out on essential knowledge.
Some of the things we’d like kids to learn at school:
Basics of personal finance
Benefits of saving
Opening a bank account
Understanding interest rates
Kids need to learn how to budget as it’s a core life skill that shows them how to manage their money effectively. This in turn can help them avoid debt and save for their future goals. It also teaches them about the importance of making wise financial decisions. By learning how to track their incoming and outgoing money, and set weekly limits on their expenses, they’ll be able to make choices that are good for their financial future.
Related: Budgeting for kids
2. The basics of personal finance
Personal finance is the process of managing your money to meet your financial goals. It includes budgeting, saving, investing, and managing debt.
“Managing money effectively demands a sophisticated set of skills ranging from basic mathematical skills to budgeting, an understanding of how interest works or emotional regulation to avoid splurging,” says Louise Hill, co-founder and COO of GoHenry.
To teach the basics of financial responsibility to kids, start with needs versus wants and regular pocket money that will put these discussions into practice.
3. Benefits of saving
Teach your kids about good money saving habits as this will help them understand why saving is a crucial life skill. Beth Zemble, VP for Education at GoHenry, says: “From the age of 6+ kids can be taught the importance of saving. Have your kids set savings goals for things they want and celebrate their achieving them. You can even instil a savings habit, like always putting aside a portion of allowance or gifts to go into savings. If we learn to put money into our savings as a matter of course, that habit can continue as kids transition into adulthood and begin to budget to pay for their needs and wants.”
4. Opening a bank account
Once your kids understand money, talk to them about how a bank works and why people use them. Be sure to show them how to deposit and withdraw money, and when your kids are ready, help them apply for a bank account for their weekly pocket money and savings.
5. Understanding interest rates
Interest rates can be challenging to understand for kids, but understanding how they work can help them make better financial decisions in the future. Explain that interest is a fee you pay to borrow money or the fee you get for saving money. So if you borrow £100 from a bank, you might have to pay back £105. The extra £5 is the interest. Likewise, saving £100 with the bank could get £5 extra in interest.
Related: Explaining interest to kids
Explain what loans are using real-world examples, such as car loans or mortgages. Tell your kids that when you buy a car with a loan, you borrow money from the bank to pay for the vehicle. You must repay the loan, plus interest (see above), over time. Be clear about the risks. Explain that you must meet your loan payments on time to avoid financial trouble.
You may feel it's a while before your kids need to understand the world of credit, but the sooner you start talking about it (in an age-appropriate way), the easier it will be. Explain credit is when you borrow money from a lender (a person or company), but it's not free as you have to pay it back, usually with interest.
Related: Teaching kids about credit
8. Debt handling
Debt handling is the process of managing debt (this could be loans, credit cards, mortgage payments, or money you owe on bills) to minimise your financial stress. You don't have to go through debt handling alone when you're an adult, as charities like The National Debtline will help you create a repayment plan.
Investing is a way to grow your money over time. When explaining how to invest, it's essential to be clear about the risks of investing. You can demonstrate that the value of stocks can go up and down and that you could lose money if you invest in a stock that goes down in value. You can also explain that investing takes time and that you shouldn't expect to get rich quickly.
10. Environmental Awareness
While there are modules on the environment and environmental issues within Geography, Science and PHSE, it's not always in-depth. According to UNESCO, there are three reasons to provide children with a strong ecological education: To make them more aware and conscious of environmental problems; to boost their interest in caring for and improving the environment, and to enhance their ability to learn about their surroundings. Help expand their knowledge with documentaries on YouTube and with National Geo Kids.
Related: Sustainability for kids
Cooking is taught to some extent in years 7 to 9, but to give your child more extensive cooking skills, involve them in making everyday meals. As they get older, empower them to make their breakfast and lunch and cook alongside you for evening meals.
DIY skills can teach kids important life skills, such as problem-solving, creativity, and patience. These skills can also help them save money by allowing them to fix things around the house themselves, rather than hiring someone else. Start small by doing things like changing light bulbs, fixing a broken toy and painting walls.
13. How to look for a job
The job search process can be daunting, and kids won't know where to look if you don't help them. Show them online job boards like Indeed, Monster, and CareerBuilder. Kids can also search for jobs at local businesses. They can ask their friends and family for recommendations. For longer-term employment when they are a teen, help them create a LinkedIn profile (LinkedIn is a business and employment-focused social media platform).
Related: First job as a teenager
14. How to read a payslip
Research from the Money Advice Service has found that teens need to prepare for working life, with only 59% saying they understand their payslips. Talk them through and explain that a payslip provides proof of their earnings, as well as gross earnings - which is the money earned before taxes and other deductions are subtracted, and taxable earnings - this is earnings less any salary sacrifice deductions such as a pension.
15. How to understand taxes
Taxes are a complex topic, and it's not something that most people are naturally good at. Explaining taxes and how they apply to life and earnings can save your teen money and headaches as an adult.
Related: Explaining Taxes to Kids
With so much of the school curriculum focused on academia, there's often limited time to teach kids how to be entrepreneurial. To help with this, encourage your kids to be creative and innovative and to think outside the box. Show them the many different ways to create and start a business and encourage them to start their own business.
Related: Entrepreneurship for Kids
17. How to set goals
Goal setting is identifying what you want to achieve and then creating a plan to make it happen. It is a valuable skill for kids as it can help them learn how to set and achieve their own goals throughout life. Teach them how to set specific, achievable and measurable goals.
18. How to write a CV
Explain that a CV is a document summarising your work experience, education, and skills, and your kids will use it to apply for jobs when they are older. Show them examples online or your CV and download free templates so they can start to put their own together.
19. How to excel in a job interview
Before a job interview:
Talk to your child about what to expect.
Explain that interviewers will ask questions about their skills, experience, and why they are interested in the job.
Be sure they are ready by role-playing some job interview scenarios and questions with them before interviews and discussing appropriate dress.
20. How to ace public speaking
The earlier you start helping your child with public speaking, the better. Even young children can learn the basics of public speaking, such as how to make eye contact, speak clearly, and project their voice. The more your child practises public speaking, the more confident they will become at speaking in front of others. Help your child practice by giving them opportunities to speak in front of a small audience, such as family or friends.
How can GoHenry help improve your kids financial education?
GoHenry's mission is to make every kid smart with money. The debit card and app are packed with great features that helps kids and teens safely and securely learn about money, from saving to smart spending.
In-app Money Missions make learning about money fun and engaging with videos and quizzes covering everything from saving to budgeting.
Parents can set flexible parental controls in the GoHenry app, and receive real-time spending alerts whenever their kids or teens use their GoHenry kids’ debit card or teen debit card. You can also create savings goals and recurring pocket money payments.