Three money lessons I'd teach my kids

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Many Britons' financial woes could easily be blamed on our lack of basic money management skills. Certainly, thousands of us enter into credit agreements and complicated financial arrangements without clear ideas of what they involve.

However, it seems that change may be on the horizon: Dozens of MPs have now come together to push for financial education lessons in every school...

Yesterday saw the launch of a big All Party Parliamentary Group - with 120 MPs coming together to push for change. The aim of the group - for the Financial Education of Young People - is to get financial education prioritised more highly by the government.

Eventually, it is hoped financial education will become a regular part of schools' teaching agenda, to ensure the next generation has a sold grasp of monetary fundamentals.

As reported here, the chairman of the group, Justin Tomlinson, explained: "Young people are entering an increasingly complex financial world of store cards, mobile phone tariffs, credit agreements and financial marketing. Through my MP casework, I have seen first-hand the implications for those who have made poor decisions, too often through a lack of understanding."


So, what are the money lessons you wish you'd learnt as a nipper?

Here are three tips I wish I'd been taught sooner:

1. Don't be loyal to your bank
Children are often giving nice friendly-looking money boxes when they start their first account. I think this is a crafty (and very effective) attempt to instill a sense of brand loyalty at a young age.

But don't be fooled! When it comes to financial products, new customers very often get the best deals - so don't be afraid to take your business elsewhere and shop around.

2. Students don't get free money!
When you become a student, a world of borrowing possibilities seem to open up. As well as a substantial student loan, you're likely to be offered a big overdraft facility and a shiny new credit card. It's easy to forget that this isn't free money - in fact it isn't even yours.

That overdraft will start charging interest soon after you graduate, that credit card is likely to start charging interest straight away, and that student loan is likely to hang like a millstone around your neck for years to come.

So - try to exercise extreme spending caution as an undergraduate. In these tough times, there's no guarantee that a well-paid job is waiting for you at the end of it.

3. Start saving for retirement as early as possible!
When you're young, retirement seems light-years away. Because of this, many of us don't start saving for a pension until we're well into middle age.

However, with the state pension ever-dwindling and the retirement age rising, we all need to start saving as early as possible to avoid a poverty-stricken old age. Read this recent WalletPop post to find out more.

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