Teaching children the value of money
With the news that more than a third of 18 to 24-year-olds are already in debt, Mum Louise Hill found a way to help youngsters manage their money at an earlier age
The occasional 10p thrust into our palm with the warning to, “spend it wisely”– even though we’d spend it on sweets anyway – is how many of us learned about money as youngsters. But for today’s children, living in an increasingly cashless world with endless and easy access to buying online, it’s a very different experience.
That’s something Louise Hill, pictured below, realised when she received a flurry of bills for things her children were downloading on the iPods they’d just got for Christmas.
“I was alarmed by how much money they were spending, even though they didn’t realise they were actually spending money – because it wasn’t in cash that they could see,” says Louise (57). Then one Saturday morning, talking to other parents as her son played football, Louise realised she wasn’t alone in feeling her children’s spending was spiralling out of control. “One parent’s child had run up a £600 bill on her games console,” she says. While most of these parents had been trying to teach their children about responsible spending by giving them pocket money in cash, Louise realised they needed a different tool to help teach them in this new online world, as well as protecting parents. That’s when she and a couple of the parents hit upon the idea of gohenry, a pre-paid debit card and app that allows parents or grandparents to pay pocket money onto a card that can be spent online, on the high street, or withdrawn as cash. Parents can set limits on how much a child can spend in a single transaction, or in a week, as well as setting tasks that allow children to earn extra. “It enables adults to set parameters for spending and gives children empowerment as they have their own card and are able to make their own decisions which helps them learn,” says Louise.
When she tried out the card on her own children, Louise says she noticed a big change in behaviour as they realised that if they wanted something, they needed to save up for it. They also learned from their mistakes – if they spent all their money on one thing, they soon realised that meant they couldn’t afford something else. “We always say it’s far better to make a £20 mistake aged seven than it is to make a £2,000 mistake aged 27,” she says.
After all, with research suggesting 37 per cent of people are already in debt aged 18-24, teaching them money management at an earlier age makes sense. In fact, studies have shown that money skills start to be formed at age
‘Far better to make a £20 mistake aged seven than make a £2,000 mistake aged 27’
seven which is why gohenry, which now has 1.2 million customers, is available from the age of six.
By giving youngsters the tools to properly manage their money, Louise says a surprising finding is how many of them give their money to charity. Through a partnership with the NSPCC, gohenry children have given away £100,000 of their pocket money.
“This generation actually have a very mature approach to money, saving and giving more than many UK adults which is encouraging for the future,” says Louise.
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