/ Money, Parenting

Kids, stop stashing your cash and put it in a bank

When it comes to the saving habits of 11 to 18-year-olds, there’s good news and bad. Some 91% are saving regularly or occasionally, but only 28% are banking on the high street. The rest are stashing cash at home.

MyBnk, which carried out the survey, trains kids aged between 11 and 18 to run their own saving and lending schemes in London schools. It therefore helps our kids understand how banking works and what to do with your money.

Education, education, education

Introducing the concept of managing and dealing with money at an early stage has to be a good thing. I’d like to think that my kids will grow up understanding the value of saving and will have a sensible attitude towards borrowing.

The likes of the Personal Finance Education Group do good work in equipping young people with skills and knowledge in financial matters, but should we go further and make personal finance education a central part of the national curriculum?

The challenges facing today’s kids are even more testing than in the past with those going on to further education likely to build up huge levels of debt. There has to be more that we can do to give them a helping hand.

Children’s accounts aren’t very tempting

It’s obviously not a good thing that 72% of kids are leaving their saved cash in piggy banks or hidden under the mattress. As well as the security issues, there’s the fact that these savers are losing out on potential interest.

That said, when we looked at children’s accounts in August 2011 we found that half of easy-access children’s accounts on the market pay less than 1%. Many accounts pay an even more paltry rate of 0.1%. Is it any wonder that kids aren’t bothering to use these high street accounts and are instead keeping their money stashed at home?

Questions for children, parents and providers

The survey from MyBnK, therefore, raises two key questions about young people and their money. Namely:

  • Is it important that our 11 to 18-year-olds get into the savings habit and learn about personal finance at an early stage?
  • And should financial providers make more of an effort to create better products to inspire our children to save?
Mikhail says:
4 September 2011

When your kids will grow up, I don’t think they will have much to save, because:

1. The birth rate is higher than the job creating figure.

2. The retirement age will be moved forward, therefore less new opportunities will be available.

3. Unemployment will go up considerably, due to new technologies and an increase in efficiency of production/retailing/services etc.

4. Taxes will also have to go up as we live longer and we are approaching time when for 1 pensioner there is only 1 taxpayer/worker and it will be even less.

5. And if the UK economy will remain dependent from gamblers and speculators (financial services) it will make things only worse, because money can’t make money, but in our reality even money have became a commodity.

6. As the tuition fees has gone up, the smaller amount of British youth will be able to access to the higher education therefore, get a better job or get a job at all, as a result we will have more trouble with less equal society.

7. BNP will be more popular…

The current version of our ecomony is out of date.

Even with a couple of grand, the interest on such an amount is pitiful, while banks are gambling with your money on investments and profiteering off it. Frankly, I think these kids have got the right idea, and maybe financial institutions should offer better incentives.

Reality is, though, on a few years time we’ll all be swiping our phones and making the majority of our purchases digitally.

Mark, good point about technology moving on but I think the point you’re all missing is that the later you start dealing with money, on however a small scale, the harder it is to manage it.

Banking, in whatever form it may or may not take, is a fact of life – bills must be paid, goods and services procured, capital exchanged.

As a nation we are financially illiterate and carry record personal debt, through education and practical experience we can start making the banks, and more importantly our money, working for us rather than against us.

Well, you know, over the last few years I’m convinced that students should be taught consumer rights and how to properly manage their finances and budget, but I’m a cynic, and I don’t think it’s in the interest of big business, so they won’t.

Why should my children and me come to that give the banks our money in so called ‘savings’ to invest and profit from when we get nothing in return? Cash is better under the bed!

Hi Jane, I’ve addressed some of your points in the post above.

My son saved up a considerable sum in his piggybank. Come the day he wanted to put it into his account he wasn’t able to – the banks wont accept a large number of coins and wont even offer the bags to put them into, as they used to. His other option – pay the coin counter at the supermarket a fee. He took pride in saving and counting it so why should a child have to fork out from his hard-saved pennies?! Come on banks, how about encouraging these early savers, surely you can afford a few measerly bags, after all you may have their custon for many years. Dont entice these children with promotional junk, take them seriously as savers and reward them with some bags and a decent interest rate!