How ii experts get their kids excited about saving

Ahead of My Money Week 2022, interactive investor experts explain how they learned about money growing up, and how they talk to their own children about it.

Monday 13 June marks the start of My Money Week 2022, a nationwide initiative aimed at school-age children to help them gain confidence in money matters.

Helping children and young people gain personal finance skills is something interactive investor, the UK’s second-largest investment platform for private investors, is firmly committed to.

In December, together with the judges of the interactive investor Personal Finance Teacher of the Year Award, ii published an open letter to the Department of Education, asking for a series of crucial measures to help address the impact of a clear lack of financial capability in the UK. With the levelling-up agenda a long-term commitment, we continue to ask the government to give personal finance lessons in school the priority they deserve.

For those teachers who are going the extra mile, nominations are currently open for the interactive investor Personal Finance Teacher of the Year Awards. These awards are to recognise excellence in financial education teaching in both primary and secondary schools. To nominate a teacher, email teacher@ii.co.uk. Teachers can also nominate themselves: email teacher@ii.co.uk with lesson plan and supporting statement.

As we go into My Money Week 2022, interactive investor interviewed its in-house investment experts about not only how they learnt about money growing up, but also how they talk to their children about money, and any fun tips and tools that can be replicated at home.

“Stress about money and debt”

Becky O’Connor, Head of Pensions and Savings, interactive investor: “My own upbringing was filled with stress about money and debt. The experience of what financial insecurity can do has made me consider quite carefully how I talk to my children about money. They are only 10 and 7, but from an early age, I want them to understand its value and power; to teach them to respect money and never take it for granted.

“Not surprisingly given my line of work, I talk to them about long-term investing and pensions. They quite like maths, so the magic of compounding has gone down well. I’ve sold pensions so well that my eldest has asked if I can open a junior one for him!

“Having Junior ISAs in their name has been an excellent way to demonstrate how little and often can add up to some big numbers. The idea of turning £50 a month into £5,000 in five years is particularly powerful – always easier said than done!

“They are interested in tax – as I have explained that you don’t get to keep everything you earn. The idea of paying an amount for communal good is interesting to them. They pointed out unprompted the flaws in this system if the money is not well spent, so it’s a way into politics, too.

“They live in an unequal world so they can see with their own eyes the impact of not having any money. I do wonder if I have made them quite money-motivated as a result of all the money talk and try hard to make sure I’m not actually fostering greed!

“But it is a hard, expensive, adulthood that awaits them, so I do believe they need to know how important hard work is and how difficult it is to afford things such as buying a house and going to university, and about debt and all the traps they could fall into along the way, if they aren’t careful.”

“Parents play a starring role”

Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The seeds of financial literacy are first planted and nourished at home. Parents play a starring role in ensuring that their children have a good grounding in key financial concepts such as budgeting, savings, and investing before they have to do it all for themselves when they reach adulthood.

“The key is start money education from a young age. In the Jobson household, I’ve been teaching my four-year-old daughter the ABC equivalent of financial education. She’s learning how to distinguish and count money. I challenge her to find different ways to make the same sum of money using coins, for example - making 12p using 10p, and 2p or 5p, 5p and 2p. We also play ‘shop’ to give her an opportunity to apply the skill, using fake everyday grocery item with set prices engaged her further. So far, so good.

“One of the most practical ways of teaching older children about the benefits of savings and investing is by putting theory into practice. A Junior ISA can be a great way for children to engage in a money pot that will ultimately be handed to them when they reach adulthood. They won’t be able to invest for themselves, but you could stoke their interest by including them in the conversation and investing in things they might be interested in – Sony if they are a PlayStation advocate, for example. Of course, it is important to remember that diversification is key when it comes to investments.”

Alice Guy, Personal Finance Editor, interactive investor, says: “I’m a big believer in talking to kids about money. They grow up so fast and it’s not long before they’ll need to start making their own financial decisions.

“A good financial education has never been more important. With buy-now-pay later loans, the explosion in crypto investment and social media, kids are being constantly bombarded with confusing messages about money and investment.

“We’ve just started giving my 12-year-old daughter an allowance for her spending. She can make her own decisions on what clothes to buy and when to spurge on a milkshake when she’s in town with friends. And it’s a real-life lesson in budgeting. If she spends all her money, she can’t afford something she wants until next month.

“It’s all about taking those little opportunities with our kids. When the Junior ISA statements drop through the door, it’s a great chance to talk about investment. We take a look at how much they’ve got and see if it’s gone up or down during the year.

“This year it’s been interesting! They’ve experienced stock market volatility first-hand but can still spot how investing in shares tends to beat cash in the long run.

“It’s great that at ii, through our award, we are able to help acknowledge teachers who are going the extra mile and helping kids understand more about earning, budgeting, saving and investing.”

Sharing his experience in learning about money, Sam Benstead, Deputy Collectives Editor, interactive investor, says: “My earliest “financial education” memory was being encouraged by my parents to put part of my pocket money into a building society savings account – they matched any contributions I made.

“Deposits and interest were recorded in a logbook and stamped by the bank, giving me a physical record of how much I had put away and how much interest it had earnt (around 5% a year in the 1990s). Then, very proud of my savings pot, I’d spend the money on something I had been saving up for – often football cards or video games!  

“So, rather than teaching me a lesson about interest rates and compound interest, it encouraged me to always save a little of what I “earned” and be proud of putting away money for a bigger future purchase.”

Are you, or do you know, a teacher that is inspiring young people about money?

Nominations for ii’s Personal Finance Teacher of the Year Award can be made by anyone (including parents, guardians, and pupils) who is resident in the UK.

To nominate a teacher, parents, carers, or pupils should email teacher@ii.co.uk with the teacher’s name along with the name and address of the school, by Monday 25 July 2022. We will then approach the teacher and ask them to submit their lesson plan and brief supporting statement (teachers will need to submit this by Monday 8 August 2022).

Teachers can also nominate themselves, by emailing teacher@ii.co.uk with a lesson plan and supporting statement by Monday 8 August 2022.

Only one entry may be submitted by any person.