Debt advice: Seven tips for teaching children about money
Miles Picknell, Christians Against Poverty (CAP) Debt Centre, Upminster
- Credit: PA
In his latest column, Miles Picknell, manager of Christians Against Poverty Debt Centre in Upminster, has some handy tips on teaching children about money.
We all know how important it is to handle money well. It’s one of those essential life skills we all need. But when it comes to teaching kids about this subject, where do you start?
It can be daunting to decide what age to start your child’s financial education, let alone what you need to cover.
Read on for seven tips to help your children grow up equipped and confident to manage their money.
Encourage a healthy attitude towards money
There are lots of practical lessons to learn, but a great place to start is to encourage children to have a healthy attitude towards money.
Show them that money is a tool and serves a purpose – it’s not something to acquire for its own sake – and that it’s important to be in control of it, rather than controlled by it.
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Let them see how you plan your finances
Kids learn by watching and copying the adults in their life, so why not show them what you already do?
If you have a budget written up somewhere, or use an app to keep track of your finances, let your children see that you’re putting time and effort into managing your money. They’re likely to remember this when making their own decisions in the future.
Talk to them about budgeting
Sometimes it’s important for us to be reminded that it’s okay not to be able to buy our kids everything they want – it can even be an important learning opportunity for them.
Don’t be afraid to talk about budgets, and the fact that money is a finite resource to be used wisely.
Let them practice handling their own money with an app
Apps like GoHenry are useful tools as they can help empower children to budget and manage their own money, while parents can set up spending limits and get notified when the account is used.
Help them learn to save up for the things they really want
As it gets easier and easier to "buy now, pay later", one really useful skill to teach our kids is how and why to save up their money.
Show them the value and reward of waiting to buy things like toys and treats – could they get a better version if they save up first? This is a lesson they’ll take into adulthood.
Pocket money can be a useful tool
Pocket money can be a great way to practise those saving principles mentioned in the last point.
When your child asks for something, you can encourage them to save for it with their pocket money. This teaches them the value of money and shows that if they are patient they can save for what they want, by which time they may have realised they don’t want it so much and can get something else.
Give them some responsibility to choose how money gets spent
Finally, don’t underestimate the power of giving kids a bit of (age-appropriate) responsibility.
If they’re old enough to understand budgeting, why not put them in charge of deciding what to buy for pudding this weekend, or for a day out with the family?
This is a great way to teach them about making good spending decisions in a way that empowers and encourages them.