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These are unprecedented times in which to bring up children and one of the vital lessons we can pass on to them is to teach them how to understand and manage money. Without a real appreciation of how to handle finance, so many adults end up in debt – often because no one ever taught them how to manage money when they were young.

We are all bombarded with slick advertising for ‘must have’ products or experiences that are backed up by ever increasing access to easy credit or ‘buy now, pay later’ schemes, tempting us into instant gratification. It is therefore vital to give our children a grounding in personal finance to help them appreciate how money can work for them, rather than against them.

Show them by example – when you take them shopping, show them how much you spend on food and that money is a tool and enables you to purchase items. Explain that having £10 in your hand does not mean you can buy something worth £10.01.

Do they know where money comes from? – explaining the concept of working for pay should be emphasised from an early age.

A piggybank – start the savings habit early. Cash might be going out of fashion, but making the connection to value is helped immeasurably by understanding coins and notes and what they represent.

Pocket money – in exchange for chores done around the house, pocket money is a good practical demonstration of the connection between work and reward.

Saving – insist that a percentage of their pocket money goes into savings; perhaps a piggybank for the very young or helping older children to open a savings account either online or via an app or passbook, in which they can see their money grow.

If children want to buy a specific item or service, or set a savings goal, this can help them learn how to budget and to understand that saving, rather than just instant acquisition via the Bank of Mum and Dad, fosters independence and recognition that saving leads to better outcomes.

As children move into their teen years there is now a range of debit cards linked to apps

which can also help them to see what they are buying, how much they spend and how much they have left. Spending limits can be applied by parents, but spending limits are not a substitute for parental guidance from an early age.

The world is becoming an increasingly difficult place to navigate, especially for the young. So, a basic grounding in managing money can be one of the best gifts you give to youngsters.

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