- Talk about bills and where money goes. Explain ways to pay including direct debits, monthly bills, etc.
- Have children help you find the best price by comparing prices in stores.
- A budget, or money plan, also helps with looking after money. Explain what you spend money on and how you know where money has to go.
- Keeping track of spending helps to manage money and children can start to do this. Have them write down any money they get, how much and what they spend it on.
- Talk about their friends and money. What are they talking about? Why do they want some brands over others? Does branding make it better?
- Help children to make a budget. What happens if they go over their limit?
At this age children may start asking for a mobile phone. This is an opportunity to talk about money and phones:
o How much do they cost?
o What is a contract?
o Pay as you go?
o What does it cost each month?
o What if they use up their credit?
o What happens if they lose it?
Dealing with Money Choices: At this age you can explain to your children that they have to make money choices – and you can explain the different between a right choice and a wrong choice:
o To buy or not buy
o To save money
o To buy less expensive brands
o To give our time rather than gifts that cost money
o Not to buy something because it is “the latest”
Dealing with Wants: When your children ask for things, there are ways to help make it less stressful for you and teach them at the same time
o Before you go out shopping, make a list. Let children help. Explain that you will only buy what is on the list as this is what you have money for today. Get them to help you stick to it.
o If you are going somewhere tricky like a toy store plan ahead. Explain what you are buying and why. Keep reminding them of what you’ve agreed.
o Let children save up for things they want. If they decide to spend money on something else it is their choice. If they later regret it they will learn not to do so next time.
o Suggest they put what they want on their birthday or holiday list. Often this helps children feel heard and deals with the want, and they may even forget about it. When you get close to their birthday, if they don’t want the items anymore, they can make a new list. But it is a good way to show children how things they want change and are not always things they need.
o Agreed with your children certain benchmarks – passing all their exams or participating in an event – and rewarding them with something they want.
o Don’t just say no to children, explain why. If you are not happy with what they want explain to them what you choose to spend your money on and why.
o Saying we have money for what we need (food, heating, our home) but not wants (or extras) right now helps them understand choices we have to make about money.
Pocket money is a great way to help children learn how to manage their own money and give them the opportunity to save up for things. How much they get isn’t important, what matters is that they practice with their own money.
o Give them weekly pocket money to buy their own sweets, toys, and other treats: Let them save up for what they want and only give toys or treats at special times such as birthdays or holidays. Some parents say this helps to stop children asking and teaches them to budget and save.
o Give them weekly pocket money, but still buy extra toys, treats, etc.: This way they get money of their own to manage but you still buy them extras. While this way might seem easier and avoid children getting upset, parents say the downside is that their children still pressure them and do not learn the value of things.
o Children earn their pocket money by doing chores around the house: For some parents the idea of earning all your money sends a good message. Others think children should help out because they are part of the family, not for money. Children may also not get regular money if they do not help, which will make saving harder.
o Give them weekly pocket money and have them earn extra by doing jobs around the house: Some parents like this as their children get regular money to manage but can earn extra. They say children help out more but do think about what you can afford. Again, some parents do not like this because they want children to help as part of the family and not for money.
Extracted from the booklet ‘Talk, Learn, Do: Teaching your children about money’ produced by Made of Money, a project of Quaker Social Action for the Money Advice Service.