Understanding the value of money is one of the most important lessons in life and it’s never too early to learn about it.
Since 2014, financial education has been a compulsory part of the secondary-school curriculum in England. But what about children of primary school age? A 2013 study from the University of Cambridge found that by the age of seven, most children have already developed their attitudes towards money - both good and the bad - which many of us may not notice.
A scary realisation when you consider that these are habits that will stay with them for life. No pressure then, mum and dad! To make sure you can help them as soon as possible, we have come up with five top tips to help you teach your children about money…
Teach them how to budget
If young children are able to see you planning your budget, they will become more interested in wanting to know how they can separate out their money. By sitting down and working out which areas your child would like to spend their money, on things such as toys, sweets and clothes, they will be able to see how much they have, how much they need to save and where they can avoid spending from an early age. These skills will transfer into their adult lives when they have to work out living, bills and personal items.
Take them to the supermarket
Most of us get our first experiences with money when we go to the supermarket with our parents. During your weekly shop, it’s a great time to start teaching your child about money. Do the maths with them to help you chose the best value items as you take things off the shelves and, when it comes to paying at the check-out, help them get out the correct amount and then let them hand it over. This will give them an important lesson in the responsibility of handling money and actually paying for things.
Teach good pocket money habits
Pocket money is a good way of getting children to understand money management. Make sure you give them the same amount each week because if a child knows how much they will get they will find it easier to save for things they want. It will also make them feel more grown up, having a ‘regular income’ like mum or dad. Once the money has been handed over, provide them with a money box or a savings account that they can store the money in and be sure to highlight how good it will be to build up their savings in the future.
Teach them about virtual money
Modern technology gives children plenty of opportunity to learn about money and there are many apps out there to help teach your kids the basics. As they get older, and get their own mobile devices, your children will become more responsible with their own real money (well, sometimes your real money!) through opportunites to do online shopping or by spending money on digital games and apps. By introducing them to money apps from an early age, you are instilling a strong understanding of how money works.
Finally: When it’s gone, it’s gone!
Showing your children that money is limited and doesn’t grow on trees is vital, as it shows them that they can’t have everything when they want it and that it’s best to plan what you need to buy and when. The most important message you can give to your child about spending is that “when it’s gone, it’s gone”.
Those piggy banks have never looked so good.