For kids (and big kids): Top tips for managing your money
Published on: 09 November 2020
We all have to think about money - whether it's buying a new comic or doing a weekly shop. Author Rashmi Sirdeshpande believes that setting kids up with good finance skills early on can really help them later in life, so she's shared her top ten tips for managing your money (grown-ups, you can use them too!)
MONEY. Whatever you think of the stuff, it’s something we all have to deal with at some point in our lives. It’s the thing that pays for the food we eat, the clothes we wear, a place to live, and all the little extras. Someone’s probably taking care of a lot of those things for you today (phew!) but someday, that’ll be down to you. And very often what happens is that no one really tells you much about how to deal with money. You grow up and you’re suddenly expected to hit the ground running. But it’s not that easy, and that’s why I wrote DOSH - to give you a head start.
If you get pocket money or an allowance, you can get started with these right away. If you don’t (and I didn’t!), you can focus on #1 and #10 and pop the rest in your pocket for the future:
1. Set Goals
Create a vision board with photos/drawings and notes about things you’d like to have, the kind of life you’d like to live. Little things (like that game or pair of trainers you have your eye on) and bigger things for later on. If you’re going to build a roadmap (and that’s what money management is all about), it’s nice to know where you want to get to. And it’ll help you stay focused on being a savvy spender and a sneaky saver.
2. Know that managing your money is about making choices
Unless you’ve got a genie in a lamp somewhere or a magical wish-fulfilling fairy friend, you’ll have a limited amount of money. So you’ll have to decide what to do with it. Every £1 you spend on one thing is £1 you can’t spend on something else. Gotta make some choices…
3. When you do make choices, make clever ones!
Some things matter more than others. Some things last longer than others (a book you can read again and again vs an ice cream that’s gone once you’ve gobbled it up, for example). And if you’re saving up for something, you might have to give up a few things along the way so you can get hold of it faster!
4) Be a savvy spender - don’t be fooled by tricksy advertisers
Advertisers are paid to make you want stuff. Or, even worse, to make you think you need stuff even if you don’t. Even if it’s even on your vision board. Watch out for this, and beware the special offers that aren’t really special. Things like “BUY ONE GET ONE FREE” or “50% off"! They make you think you’re getting a great deal but whatever the discount, the real question to ask is do I really need this and is it worth this much to me?
5. Draw up a budget (just a fancy word for a plan)
It can be super simple - just note down all your Money In (things like pocket money or birthday money) and all your Money Out (the things you plan to spend it on).
6. Track your spending
Planning is the easy bit. Tracking everything you end up spending money on lets you see how you actually did. Did you stick to your plan? Could you do better? Knowing how to plan and track your spending is a super handy skill that will set you up for life. Seriously.
7. Save as you go (even if we’re talking pennies)
When you make your budget, add a little line for savings in your “Money Out” section. It’s a good habit to get into even if you can’t save very much at all. It all adds up, I promise. And the habit is the biggest thing.
8. Keep your cash safe
Keep your money in a bank account. Keeps it safe from burglars. But also from you (it’s so easy to dip your hand in that cookie jar or money box)! and it’ll earn some “interest” too (free money - hello!). OK, it won’t be very much at the moment but it’s something!
9. Be a sneaky saver at home
Tighten up your super saving skills for later in life by practising at home today. Sit your grown-up(s) down and figure out ways you could slash that spending and save some cash. Things like turning the lights off after you leave a room to save on electricity, planning meals to cut down waste, and coming up with free or cheap ideas for fun things to do (I bet you could come up with loads!)
10. Remember that money isn’t everything
Cheesy I know but look back at your vision board and think back to the kind of life you’d like to live. Some of that stuff doesn’t cost a thing. Might be things like hanging out with friends and family. Laughing together.
I know sometimes it feels like you want something and maybe everyone else has it and it’ll take you ages to save up for it. Sure, you can work towards it but there will always be more stuff like that (even the richest people have an island or planet somewhere they can’t quite afford - it's endless!) Every now and then, remind yourself of the things you do have. Stuff to be grateful for. The stuff that really matters the most. Because once your basic needs are taken care of, chances are it won’t be money.
There you go - 10 top tips. And - you know I have to say it! - there’s lots more in the book, not just about managing your money but how to MAKE the stuff (hello future entrepreneurs!), how to make it grow, and how to give it away! One to add to your Christmas list. Consider it an investment…