October 08th, 2024

3 valuable tips for instilling financial knowledge in your young family members

“Do one thing every day that scares you”, Eleanor Roosevelt famously said.

The annual Talk Money Week, happening between 4 and 8 November 2024, encourages people across the UK to heed Roosevelt’s wise words. This year’s theme is “do one thing” to improve your financial wellbeing, or that of someone you love.

One way to boost the financial wellbeing of those close to you is to talk about money management with the young adults in your family.

Discussing finances may feel like a taboo topic in your household, but there are several ways to shake off the awkwardness and springboard these conversations.

Keep reading to learn more about the power of financial education and tips for helping the young adults in your family form good financial habits.

Why financial education matters

In today’s rapidly changing financial landscape, financial education for teens and young adults has never been more crucial.

According to research from the Money and Pensions Service (MaPS), 3 in 4 UK teachers think most young people now leave school or college without the financial skills they need, making it even more important to have open conversations about money at home.

Plus, research from NatWest reveals that young people today are more than willing to speak about money. Almost 9 in 10 (86%) of 18 – 24-year-olds say they openly talk about their money, compared to only 3 in 5 (63%) of over-65s.

3 practical tips for teaching young adults about money management

Sharing the following three tips with the younger members of your family could help them embrace good financial habits and avoid pitfalls.

1. Instil positive financial habits

Teenagers and young adults will likely be starting to realise some of the bigger goals they want to achieve in the future. For example, they may be planning to travel during their gap year or save up for a car.

This gives you a perfect opportunity to help them plan towards these goals.

For example, if they are heading off to further education but want to buy a car for that extra bit of independence, explain what their monthly income may look like and how they can budget their bills and other expenses to be able to afford it.

Before they leave home, a practical and fun way to teach teens is to let them take over your household budgeting for one week (with supervision!). You can work with them to develop a plan that will take all expenses into account, giving them the budgeting practice they need with your experience to guide them.

2. Play board games together

If you are a family who loves playing board games, this is an excellent way to incorporate financial planning lessons.

As an example, The Game of Life takes players through the journey of their life, from early adulthood to retirement, incorporating all the twists and turns that may come their way.

From deciding to go to university, choosing a career, getting married, and possibly having children, your teenager will be able to map out their approach to each major life event. This might help them join the dots between the hypothetical scenarios presented in the game, and the real-world financial choices they may need to make in future.

3. Encourage reading

Books are an effective way to engage young adults in conversations about money. Discussing these resources as a family can demystify complex financial concepts and make them more relatable.

Here are a few engaging texts to start off with:

  • What They Don’t Teach You About Money by Claer Barrett. The book aims to demystify fears around money and instil confidence. Teens can learn why their “financial personality” is essential to unlocking healthy habits.
  • Your Best Financial Life: Save Smart Now for the Future You Want by Anne Lester. A no-nonsense guide on how to understand retirement savings and investing for the future.

If your young family members aren’t into reading, try downloading a book of your choice on Audible and listening to them as a family. These texts might spark helpful conversations that, in turn, give your young adult family members a foundational understanding of money management.

How family financial planning can help

It’s never too early to plan for the future.

If you already have an established relationship with a financial planner, it’s worth involving the young adults in your family so that they can benefit from advice over the long term, not just in Talk Money Week.

From saving and investing basics to handling an inheritance later in life, financial planning could be of significant help to your loved ones.

Get in touch

Take the first step towards having open conversations with the younger members of your family and schedule a consultation with a financial planner today. Email enquiries@prosserknowles.co.uk or request a callback from one of our advisers.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

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