personal finance

How can I introduce my children to saving?


Child putting coins into a piggy bank






Children learn about spending from the moment they get their first pocket money.
Photograph: Sally Anscombe/Getty Images

When you have seven grandchildren, buying presents can be a challenge. So this year, Linda Moseley has decided to invest in Premium Bonds as gifts for her grandkids in the hope that they will learn about money and get a better incentive to save.

“It’s difficult buying so many presents for all those birthdays and Christmas, but I don’t like the idea of giving the children cash,” Moseley explains. “I’m keen to do something to get them interested in saving for themselves, and with the excitement of a prize draw Premium Bonds could be just the thing.”

It is a concern many parents and grandparents share – how to teach little ones about managing money and get them interested in saving. Children learn about spending from the moment they get their first pocket money. But instilling responsible financial habits from a young age can seem more complicated.

That need not be the case. It is normal for children to make up games involving money, whether it’s playing shopkeeper or pretending to serve tea in an imaginary cafe and asking for pennies in payment. Adults should get involved, as this can be where good financial lessons begin.

Begin the conversation about paying for things while kids are playing, then continue the lesson on trips to real shops or restaurants, explaining what you’re doing when you settle bills. Children over the age of six could be ready to handle a little money themselves, whether it’s teaching them to count up or budget their pocket money. Alternatively, you might give them a small amount to spend in a supermarket on a list of items they’ve previously chosen and calculated they can afford with the cash available.

For Moseley and her husband, Terry, from Parkstone in Dorset, buying Premium Bonds for their young grandchildren is the next step and is intended to get them into the saving habit early. Moseley says: “The kids hadn’t heard of Premium Bonds until I mentioned them. If we get them started with a present of Premium Bonds, they can get the thrill of a possible win while their savings are building up.”

As kids get older, making them realise money is not an infinite resource and has to be accounted for is essential. Explaining why you are saving for them could get them thinking about the advantages of saving. One way could be to ask them to think of a goal to aim for – say, getting enough money for a new mobile phone, game or item of clothing. As they witness money saved mounting towards the total required, they might start to think regularly putting aside cash themselves could be worthwhile. Better yet, if they get a win in the Premium Bonds monthly draw you may have created a saver for life.

Grandfather and grandson playing with till



As kids get older, explaining to them money has to be accounted for is essential.

Photograph: Westend61/Getty Images

Parents and grandparents have been buying children Premium Bonds for generations, but since August 2019 anyone over the age of 16 can buy them as a gift for any child under 16 from just £25. Whether it’s a godchild, nephew, niece or the son or daughter of a friend, now it’s possible to introduce youngsters to the savings opportunities Premium Bonds can bring, whether you are a close relative or not. All you need is their parent or guardian’s permission, the date of birth of the child and their parent or guardian, and their address.

“Premium Bonds hold a special place for many savers, and we know that often Premium Bonds are bought for a child,” explains Ian Ackerley, chief executive of NS&I, the savings provider that runs Premium Bonds. “By opening up Premium Bonds to more people, we hope to encourage intergenerational saving, kickstarting young people’s saving habits and making NS&I an integral part of that journey.”

Almost 823,000 children under 16 now hold Premium Bonds worth more than £1.3bn. Moseley concludes: “I really hope getting Premium Bonds of their own will give the grandchildren the incentive to save for themselves in the future. The excitement of a possible monthly win just adds to the fun.”

Having something to save towards can make putting money aside easier. With the help of NS&I, you can reach your goal too. Visit nsandi.com for more information



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