As your child embarks on their university journey, they’ll encounter new responsibilities, including managing their finances. By engaging in open discussions about your household budget, you can equip them with essential money skills and create an environment that fosters
trust and communication.
Encourage your child to talk about their financial challenges. Demonstrating transparency and offering guidance will help build a strong foundation for their journey towards financial independence. Here, we provide you with some helpful tips to guide these conversations.
Step one: Be prepared to be open
To give your child an accurate picture of the challenges of budgeting, it is essential to be open and honest about what has and hasn’t worked for your household finances in the past.
Start by explaining to your child how you learned about budgeting, why it’s necessary and how it has helped you. It can be useful to explain that if they are managing shared finances, they should discuss budgeting with their household to keep things fair and flexible.
Step two: Discuss your own household budget
Share your budgeting practices with your child to give them a real-world example of how to manage their finances. For example, explain how you manage money, such as setting up separate accounts or money pots to organise your spending. You could also talk about valuable rules for saving, such as the 50/30/20 method – or saving 1% of your house value to cover
maintenance costs.
Another great tip is to show your child how you handle your recordkeeping, whether that’s a notebook, spreadsheet or budgeting app like Money Mindset. Explain that creating and sticking to a budget is an ongoing process that requires discipline and should be adjusted as your financial circumstances change.
It is also useful to explain how much each person in your household contributes to shared expenses, whether you keep shared or separate accounts, who pays for streaming services and mobile phones, and who is responsible for ensuring bills are paid on time.
Step three: Include and empower your child
Try to involve your child in financial decision-making by getting them to budget for the weekly shop or a weekend away. As they become more experienced, consider asking for their input when making more significant financial decisions. This could be anything from a family holiday to a new
car. Where appropriate, include them in the conversation and ask for their opinion, explaining the implications of certain decisions. For example, spending more on a summer holiday might mean cutting back on some luxuries for a while.
Remember that, as a Standard Life policyholder, you have access to the Money Mindset app which can help you create and manage your budgets and provides budgeting information and resources.