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The innocence of youth: a six year olds guide to saving

Back when I was six years old I had little comprehension about the accruement of money, let alone saving it. Investments, Stocks and Shares ISA accounts – that stuff was simply alien to me. When my parents used to hand me my pocket money every week, I’d scurry off to the local vendor and pick up the latest issue of the Beano, post-haste. Sticking the money into a savings account just wasn’t an option. I was living in the now: colouring books and sweats were my luxury, not favourable ISA allowances and basic interest rates. And besides, my parents would take care of all that savings stuff anyway.

It seems today’s six year olds are just as negligent – in a good way – to the importance of saving money. But why should a six year old know the advantages of saving money or how expensive a house in London is? They’re six. They’re having fun. No fear grips their daily life. They’re inquisitive to the environment around them, not bogged down by bills and tax return forms – like us adults.

However, today’s six year-olds it seems are an ambitious lot: eager to go to university, secure a good job and buy their first home by the time they turn 30, which is encouraging stuff. But when I highlight that a whopping 80% believe they’ll own their first-ever house aged 25, a sympathetic smile will no-doubt cross your face. Furthermore, according to this infographic based on a recent report  published by Legal and General, 25% believe a house costs under £100 – if only.

six year olds guide to saving

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In reality, according to a recent article in the Telegraph newspaper, the average age of a first-time buyer in the UK stands at 35 years. But hey in the mind of a six year old homeownership is certainly attainable.

What about employment though? How does a six-year-old expect to pay for their future house, car, yearly holidays, etc, etc?  1 in 3 expect to earn £100 a year when they’re older – that equates to a tidy sum of £1.98 per week – and 25% believe a mere salary of £10 will be enough to cover everything they need.

Above all, conducive to their success attaining their dream house, car, etc, six year olds anticipate getting by with a little help from their parents. For example, when it comes to vehicle ownership, 50% expect Mum and Dad to help them buy their first car; 49% want that car for their 18th birthday – an epochal moment for any teenager.  A third expects their parents to cover all their university costs and fees.

Reality bites

Expectations according to a six year old strangely mirror those of people living in the early half of the 20th century – for example, when a salary of £1000 was above the national average*. Obviously savings aren’t at the forefront of every six year olds mind. However parents can help their children save for the future, even if they don’t know it. Back in 2011, the government introduced Junior ISA accounts, which allowed parents to invest a maximum of £3,600 into the fund during the tax year. They’ve proved mightily successful since their inception, allowing those not eligible for the government’s Child Trust Funds to invest for the future.

*Average salary in 1910

Following three years as a music reviews editor for Mixmag and armed with the slogan “Be an Optimist Prime, Not a Negatron!”, Dave Clough is owner of the Life Support Machine music blog and has recently taken to the lighter side of personal finance.

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