9 Jun 2026

Teach Your Teenager about Money

A recent survey carried out by the Association of Investment Companies (AIC) has found that nine out of ten parents and teachers feel basic finance skills should be taught in schools. It’s becoming clear that many teenagers are leaving education without proper financial knowledge and many are ignorant of what function many financial products serve. Sufficient financial education is lacking in schools, so you may think it an important topic to talk about at home. Here are a few things that you should explain to your children to improve their basic finance skills.

Tell them that patience is important

We’re living in a fast moving society where young people increasingly want to experience things earlier. It is important to stress that getting rich quick is very difficult unless you are very lucky. Demonstrate that saving a little over a long time is an excellent policy to having cash available when they grow older. For instance, if they save just £1 a day between the ages of 18 and 25 then they’ll have a pot of cash worth £2500 to use.

Teach them to shop carefully

Young people like to spend, and for the older generation it often looks like they spend frivolously on clothes, the latest gadget and going out. However, you can show them how to shop well, and show them where to get the best prices. If there are shops or websites that you have used in the past which you think are particularly cheap, then letting your kids know about them won’t hurt. Make sure they shop around for financial products as well, which has become much easier with the internet.

Warn them about debt

A lot of people seem to think debt is free money until they realise that their deep into the red and paying interest. Stress that by being in debt, you will be paying for having money, which almost seems like a contradiction, and in the long term this is not a good thing. Effectively, the most important lesson that any teenager can learn about money is never borrow a penny more than you absolutely need. That way they will pay less for debt if they ever accrue any. Be sure that they know that a lower APR when it comes to debt is usually better.

Show them why the interest rate matters

Consumers are too complacent and dismissive about the importance of interest rates, but like saving a little more they can make a massive difference in the long term. Many people don’t shop for the best interest rates and find out what’s best for them; they’re accepting too little when saving and too much when they borrow. Teenagers need to be warned against this attitude from an early age.

Make sure they know how to calculate a percentage

This is vitally important for thinking about both savings and borrowing, because from it they will be able to work out how much they will accrue or pay for a gross sum. Working out a percentage is easy. Divide your number by 100 to find out 1%, multiply that result by 10 for 10% or 32 for 32% and so on. So, to find out what 5% of 2500 is, divide by a hundred to get 25 (1%), then time by 5 (125).
For a good website offering low cost financial products, check out the Co Operative. They offer a broad range of ethical products suitable for young people, including 0% credit cards and low cost car insurance.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

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