How Covid is changing Young People's money management
Finances, savings, money… it’s a challenge! Money management can easily fly under the radar and is a delicate subject that young people are often unprepared for. However, alongside PE with Joe Wicks, learning to bake, and practicing spellings, has lockdown broken this cycle and given parents the opportunity to start the conversation about finances and savings with children at an earlier age?
Research suggests money habits are established as early as seven years old – meaning the earlier that kids are taught about budgeting, saving and managing money, the better! Research by Halifax has found a third of parents have used home schooling during lockdown as an opportunity to further educate their children about finances.
Giving young people a chance to put it into practice is key to reinforcing good money habits. Traditionally, pocket money given as cash was seen as an initial introduction to managing money. However, as coronavirus accelerates the digital revolution, it raises a new problem: how can parents give their kids pocket money to spend, when businesses are no longer accepting cash due to coronavirus?
Although most high-street banks offer some kind of children’s bank account, fully engaging children in their finances also means going where they are – into the world of apps. Increasingly, young children have usage of cards and apps that allow them to take charge of their own savings, with accounts that are often linked to their parents. Parents are turning to apps such as GoHenry and Nimbl that enable them to transfer pocket money into their child’s account where children can then view and spend it using a debit card or app. A third of pocket money paid in June was actually transferred into children’s accounts rather than handed over in cash – an increase of 24% compared to pre-covid, showing how the world of money is changing for kids.
We at The Hub run an annual kids and youth tracker, looking at all aspects of young people’s lives including finances. If you’re interested in an up-to-date view of young people and how they think about finances, including the impact of coronavirus, get in touch with Helen (firstname.lastname@example.org) or Afra (email@example.com).