We all worry about our children and we want them to be as happy and successful as possible. Bringing them up to handle their money wisely and sensibly is a great way to help them to grow up into secure and (relatively) stress-free adults. Here’s six ways to inculcate good money sense and habits, which is just as important as offering tips to avoid getting into debt.
Have a pretend shop
As soon as children learn to count, at aged two or three, you can teach them about money. Children of this age learn best by imitation so if they’ve seen you shopping they’ll want to copy you. Buying a toy cash register or shop, along with some pretend money, means you can set up a store in your living room and give some basic lessons. If you give them £2 and explain how much each banana, apple and bar of chocolate costs then they can make their selection (clue – it’ll probably be the chocolate!)
Go shopping for real
Children of three and four love to visit shops for real with real money. If there’s a friendly shop nearby then go in once or twice a week and let them choose a piece of fruit or another treat. What you’re aiming for is to teach them about handing money over and receiving change. Your child buys an apple for 60p and gets 40p back. Why is that? Can they use the 40p for anything else?
Start giving an allowance
Having their own money from the age of five or so gives children the opportunity to learn how to look after it. This pocket money should only be a small amount and it shouldn’t be for doing chores just yet because this age group still needs to learn about helping in the home, not shaking down their parents!
Spending, saving and sharing
This is a big lesson and is great for children aged five and up. It’s a piggy bank-plus, basically. Give your child three jars – one for spending money, one for saving and one for sharing (charity). Ideally, you should give your child an amount of money each week that’s divisible by three – £1.50, £3.00 – whichever is affordable and encourage them to split it between the jars. Sometimes, if they’re saving for something, then they can put less in the spending jar; if a friend is having a charity drive, they can put more in the sharing jar. The aim is to make your child see money as a tool they can manipulate towards a particular end.
Time for a bank account
Nothing will make a six or seven-year-old child feel more grown up than their own bank account. Having a bank account opens up the possibility of long-term savings projects; maybe for Christmas presents or a particularly coveted toy. Encourage regular deposits and regular balance checks so that your child can see their money growing, whether it’s towards a set target or just so they feel richer every week.
Pay for chores
From the age of six or seven, children can start doing small jobs around the house, washing cars or separating laundry once it’s out of the drier. This money should be separate from their allowance and it should only be paid after the job is done properly. This is a big life lesson that you work for your money! This teaches responsibility, pride and independence.