It’s important to learn the ins and outs of money management from a young age. Teaching children about finance and money management will help them to save and spend sensibly in later life.
When is the best time to learn about money management?
Although it’s wise to learn financial skills from a young age, the best time to teach children about money management is before they reach high school. This is when a number of kids begin to have their own financial responsibilities and is often the age when children get a part-time job.
Saving over time
Those who begin saving at an earlier age will have a lot more money to play with in later life. The likes of school and college fees, university fees and house deposits don’t pay for themselves. Saving just a small amount a day can add up over the years and those who save regularly will reap the rewards.
Money-management has a lot to do with budgeting and those who know how to budget are those who are able to save.
For example, spending £1.50 on a coffee each and every day of the year will amount to £1000 over twelve months. If you’re trying to save towards something, cutting down on unnecessary luxuries like this is certainly one way to boost your cash-flow.
Boosting your credit score
In order to build a good credit history and get a good credit score, you must prove that you are able to repay borrowed credit. This means sticking to all repayment deadlines for direct debits, bills, credit cards and loans.
Having a good credit score will make it more likely that you’re accepted for credit agreements and loan applications in the future but there are unsecured loans for people with bad credit too so you don’t need to feel excluded if you’ve previously been refused a loan.
Money management is also important when it comes to avoiding unnecessary debts. From student loans to credit card bills, if you don’t know how to manage your money then you could find yourself in a large amount of debt.
If you can’t pay this debt back, interest rates will continue to build and you may face bailiff action. Keeping on top of your finances and tackling debt head-on with debt management plans is always the best course of action.