We asked new father Martin Lewis, founder of MoneySavingExpert.com, the three nuggets of financial advice he would, and will, give to his baby daughter:
My baby daughter is six months old, and I always vowed to campaign to get financial education on the national curriculum before she started school. Thankfully we seem to be winning that one and it’s due to start far sooner. Here are my three tips:
1. One of the first things I’ll teach her is why there are sweets by the till in supermarkets.
The reason is simple: a company’s job is to make money, so it puts the sweeties there to try to tempt us to buy one more thing, so it can make a little more cash. It’s our job to try not to be tempted, and make the right decisions for ourselves. This doesn’t mean companies are wrong, just that they’re there to sell to us, not look after us.
2. If you spend money once, you can’t spend it again.
In other words, a lesson in opportunity cost. I’m a great believer in letting kids earn pocket money, to teach a work ethic and the real value of cash. By giving them their own money they understand there is a choice: either buy something small this week or buy nothing, wait a few weeks for the cash to build, and have the big toy that you really want. Learning delayed gratification is crucial.
3. Sometimes there are no right answers.
This is for when she’s quite a lot older. Learning about uncertainty is a crucial lesson in finance as in other elements of life. Is it wise to fix your mortgage? Will paying tuition fees be worth it? What will happen to house prices or the stock market? Without a crystal ball you can’t know for certain. Understanding that there are many shades of grey, and learning to weigh up upsides and downsides in any decision, without panicking, is a skill that keeps on giving. I only wish I had it.
Take the teen cash class at moneysavingexpert.com/teencashclass