Update May 2015: Baby MSE is still my baby, but it’s more accurate to say she’s probably little girl MSE at 2 and a half year’s old. Most of the lessons below are still in the future for her. Though she’s definitely getting the hang of haggling: "Just one Peppa Pig darling". "No daddy, five!"
Baby MSE is now eight months old. I’d always vowed to campaign to get financial education on the National Curriculum before she started school.
This week, the Prime Minister confirmed that would happen (see the MSE News story), thanks to the 100,000+ people who signed the epetition and enabled me, PFEG and Justin Tomlinson MP to spend much time in back rooms at Parliament to push for this.
To celebrate, today I asked people to tweet me (@martinslewis), and discuss on Radio 5 Live what money tips you wish you’d been taught when you were 10. There were some really interesting ones, including…
Simon Sanders: "If something’s advertised on TV, it probably needs you more than you need it."
Claire Bentley: "If mum and dad borrow money from you, charge 1p per pound interest on it!"
Michael: "Money is a representation of your time and effort – don’t waste either."
Floral Pride: "The pennies do add up!!!"
Graham Wells: "Borrowing to buy is bad… borrowing to invest can be good if you plan for a good enough return."
Mark Catchlove: "Invest in tattoo removal – it’s going to be a very big business in years to come."
David Milne: "It has to be old adage – if it sounds too good to be true, it probably is too good to be true."
Blood Donor: "If you get £1 a week and spend it all on sweets it’s gone. Spend 90p a week on sweets and you’ll have £2 in 11 weeks."
Smiffy’s Mate: "The banks pay you if you save – you pay them more if you don’t!"
Jack Ingleton: "Your Money Mantras! I bought so much rubbish when I was younger that I neither needed OR wanted."
Lyndsey Yates: "Trying to be happy by accumulating possessions is like trying to satisfy hunger by taping sandwiches all over your body."
Neil G: "Don’t buy console games as soon as they’re released. Wait a few months and you can usually get them half price."
Zoe: "Don’t spend all your pocket money on Match Attax football cards."
Three things I’ll tell my daughter
So I thought I’d add my own three tips that I plan to tell baby MSE when she’s older (also see my full Teen Cash Class for genuine financial education for your children).
1. One of the first things I’ll teach her is why there are sweets by the till in supermarkets.
The reason is simple, a company’s job is to make money, so it puts the sweeties there to try and tempt us to buy one more thing, so it can make a little more cash.
It’s our job to try not to be tempted, and make the right decisions for ourselves. This doesn’t mean companies are wrong, just that they’re there to sell to us, not to look after us.
2. If you spend money once, you can’t spend it again.
In other words, a lesson in opportunity cost. I’m a great believer in letting kids earn pocket money, to teach a work ethic and the real value of cash.
By giving them their own cash, you can start to explain that there is a choice; either buy something small this week, or buy nothing, wait a few weeks for the cash to build up, and have the big toy you really want. Learning delayed gratification is crucial.
3. Sometimes there are no right answers.
This is for when she’s quite a lot older. Learning about uncertainty is a crucial lesson in finance, as in other elements of life. Whether fixing your mortgage will be cheapest, whether the cost of tuition fees be worth it, what’ll happen to house prices or the stock market – without a crystal ball you can’t know for certain.
Understanding that there are many shades of grey, and learning to weigh up upsides and downsides in any decision, without panicking, is a skill that keeps on giving (I only wish I had it).
I’d love your suggestions for lessons for 10-year-olds.
Related past blogs:
- Give pocket money as pay, otherwise you’re ‘trust fund teaching’
- "I tricked my daughter into downshifting"
- Do your kids go to an academy school? I’ve a job for you
- Not even a mention, Mr Gove? Plus breaking the quiet carriage rules due to Financial Education tip off
- Student loans aren’t a debt – change the name to avert a national tragedy