TEACH YOUR KIDS TO BE GREAT WITH MONEY
We are more aware than ever of the need to be financially savvy, so whether you have a toddler or a teen, here’s how to encourage good habits for life
Teach your kids to be great with money
The pandemic has taught us all that being sensible with money and having a financial cushion to fall back on is essential. So how do we teach our kids these lessons so their futures will be more secure? A report by the University of Cambridge revealed that children’s money habits are formed by the age of seven. But whatever their age, money expert Sam Jennings, founder of Jennings & Co and a dad of five, says there are plenty of activities we can do to help our children learn about budgeting so they’re better with money as adults.
INTRODUCE YOUNG ONES TO COINS
Studies have shown that children can have a basic understanding of money from the age of three, and Sam says it’s important to start introducing the concept from a young age. He says, “For children under five, try playing a game that helps to introduce them to the different coins we use. This could be as simple as printing out pictures of coins, then cutting them out and sticking them on to drawings they have made. Or drawing around coins and identifying them from their shape. You could also talk about jobs that grownups have, like a policeman or taxi driver, and explain they receive coins like this in return.”
RUN A ROLE PLAY CAFÉ
According to Sam, role play can be a brilliant way to introduce the concept of buying and selling to children. “At around five to seven years old, introduce money in a fun, interactive way by getting your children to set up and run their own café at home,” he says. “This allows them to use terminology associated with money, to handle different coins and to think about how much things cost, as well giving them the opportunity to test their maths skills by producing bills and working out change.” Sam also suggests creating a menu and encouraging your children to price the items.
GIVE POCKET MONEY FOR CHORES
We all remember washing mum and dad’s car or doing the dishes for some extra cash, and we should do the same for our children, too. Sam suggests introducing pocket money between the ages of 8 to 12, but says that they shouldn’t be given it for nothing. “Pocket money should be thought of as income they receive after helping with household jobs,” he explains. “This will help to show them the concept of earning money.”
HOLD A GARAGE SALE
As children get older, they can turn their role play transactions into real life by getting them to set up a lemonade stall outside your home, or having a garage sale. Sam explains, “Once kids are finished with their old toys, books or games, set up a table outside your house or in your garage (once it’s safe to). They can price the unused items as they choose, and – remembering to socially distance – invite neighbours or passers-by to give them a few pennies in exchange, or ask buyers for a donation in exchange for some items. This will teach your children that a value still remains in their old book, albeit not to them any more. The money they make can either be given to them to buy something else or, even better, donated to a local charity. If possible, let your kids hand over the money themselves and explain to them who their money is helping and how.”
ASK YOUR OLDER KIDS TO DO A FOOD SHOP
“Encourage teenagers to learn budgeting and also the value of their daily meals by asking them to feed the family for the day on
a budget of £15,” says Sam. “Ask them to make up a shopping list including breakfast, lunch and dinner and buy the ingredients – either online or in person. And request they try to source the ingredients for as little money as possible, or for the best value. Remind them that better value for money doesn’t have to mean lower cost, it could be that you get better quality food or more variety for the same price.” Asking your teens to cook the meals themselves too is optional!
SHOW TEENS HOW TO BUDGET THEIR CASH
“It’s important that young people recognise the value of money and understand that it is not an unlimited resource,” explains Sam, who says letting teens do some budgeting of their own teaches them valuable lessons. “Giving them the freedom to manage their own budget will teach them valuable lessons about only spending what they can afford, and avoiding the pitfalls of unplanned expenses.”
Sam suggests giving your teens a set allowance to cover things like their clothes, mobile phone and toiletries. “This will give them their own freedom to shop for things they want, when they want them, but it will also show them that once the money is gone, it is gone,” he explains. “Part of teaching your teenagers how to manage their finances comes down to being strict with the money you give them and not bailing them out if they overspend. Research has shown that nearly eight in ten 15-17 year olds who cover unexpected mobile phone expenses from their own pocket say they keep track of their income and spending, which goes to show it works.”
By Annabelle Lee
● Sam is co-founder of financial planning company Jennings & Co, visit Jenningsfp.co.uk