Ways to teach your child about money, at different ages
It’s no secret that some of us find handling our finances and talking about money quite tricky.
However, the earlier in life you start thinking about money and having conversations about it, the easier it can be.
If you’re looking for ways to get your child off to the best possible start for their financial future, here are some top tips from our experts, about important lessons you should impart to your child at different stages of their lives.
Teaching toddlers about money
We’ve all seen how much our little ones love to play shopkeeper. Give them a little till and some wooden produce and it can be surprising how diligent they are.
This kind of play is a natural opportunity to introduce the concept of money and spending, ie the idea that items have different costs and require various coins. Try reversing the roles so you can play shopkeeper, too.
Financial education for children
Pocket money is the obvious solution here.
However, children often value money they’ve earned over funds they’ve been given, so be sure to set up a system where money is a clear reward for hard work.
For example, give them a set amount each time they make their bed or do their chores.
These funds can be spent on regular treats, however also emphasise the importance of saving up for a larger purchase over time. When the day finally comes, make it clear that this item is theirs and theirs only, as they saved their money to buy it.
It’s also hugely important to teach children about kindness and sharing, especially when it comes to those less fortunate than themselves. When shopping with their earned pocket money, encourage them to pick up an item or two extra and take it to a local food bank or good cause together, so they can see first hand how their donation will help.
Handing the reins over to teenagers
Once your child is old enough to open a bank account (and especially if they head off to university) it’s important to give them control of their own finances.
The key here is to accept that they will make mistakes. With university in particular, they are faced with more money than they’ve been given in their lives and can choose what they do with it.
You can be pretty certain, therefore, that they will manage it poorly, especially at first.
When they inevitably pipe up with a plea for more, don’t give in. Suggest they get a part time job to support themselves and only give them small amounts to ensure they can get by if really needed.
There are a range of money management apps out there which can help them track their spending, so they can see where they’re falling down.
Be vigilant, too, about them seeking out quick access to cash, for example high interest loans. Instead, ensure you educate them about more financially savvy options, like an arranged overdraft (subject to status) on their current account.
If you’re nervous about the kids flying the nest to uni, be sure to check out our student kitchen hacks.
When it comes to teaching your children about money, our key takeaways would be to start as early as possible, always be open and honest and show that saving, spending and giving money wisely can be hugely rewarding.
Published: 30 July 2019