How we think and feel about money and how we handle our finances through the years, is a hugely important factor in the way we live our lives, no getting away from that. Which is why I’m a firm believer that, as much as possible, children should be brought up appreciating the value of money, the work that brings it in and the advantages of treating it with respect.
You can imagine how delighted I was, when I happened to walk past and overhear a conversation between my seven year old son and his best friend. “What would you do,” asked Best Friend, “If someone gave you £1,000?”
My son thought for a second or two then came right back with, “Well, first of all, I’d save half.” This warmed my heart all the more, because he had no idea I could hear him and therefore it wasn’t an answer designed to please, just a genuine response. Nice to know, that whilst we often despair that a lot of what we say goes in one infant ear and slides straight out the other, in fact, some of it does stick.
That’s not to say that my son doesn’t sometimes get highly frustrated because even though he’s encouraged to be sensible and enjoy saving, there are times when the lure of a really-wanted something is almost too tempting to bear and those savings can feel as if they’re crying out to be broken into. And of course it’s not just kids, is it, who are sometimes tempted to throw caution to the winds? There’s probably not one of us who can say we’ve never, on occasion dipped into savings, fully intending to put the money back.
But once those funds have been used, it’s always harder, however good the intention, to replenish them. Some of us are stronger than others when it comes to this sort of thing, maybe we’re just naturally iron-willed, maybe we’ve learnt from past errors! But if you fear you’re one of those whose spirit is willing but flesh might be weak, it’s always good to try and put in place a few safety measures. Possibly have things set up so that there’s a second person who has to agree to use of the funds before you can spend them – perhaps your partner or a non-partisan outsider, such as myself. Using an outsider has the additional advantage that not only are you getting professional financial input, but dealing with a professional means you’ll be less inclined to throw yourself on the floor and have a tantrum at not being encouraged to spend what you want – something we can all be tempted to do if dealing with a partner.
Another very simple yet common sense step, is not to have your savings account details online with your current account. This means that every time you log on, you won’t see what’s in your savings and be tempted to make inroads. Separate them so you then have to logon to a completely different account to get access to each.
And, on the subject of savings, it’s coming up soon to the end of the tax year, so don’t forget to ensure you’ve fully utilised your ISA allowance of ÂŁ15,000 cash/stocks and shares and paid into your pension.
Remember those Venture Capital Trusts (VCT’s) from last month too.
