Teaching kids the value of money

Ticklemouse

There was a program on TV sometime within the last year I think, where Colleen Nolan and her 2 teenage sons were taught about the value of money, because the 2 boys thought it grew on trees and she was terribly in debt but just kept spending on the kids. Can't remember what the prog was called but they called in an american woman who basically gave them 80% of what their mum spent on them every month (other 20% split between savings account and charity). They were given a lump sum on day 1 and told, spend how you want, this is a list of what you are responsible for buying for yourselves, but when it's gone, it's gone! Result - both boys SAVED money cos they realised how much they were wasting on rubbish/unnecessary items.

According to this woman - who had had financial problems previously so knew all about digging herself out of big holes, the sooner we start teaching our kids, the better, and this type of system can gradually be introduced according to age. They'll soon learn if they are not given any more when it runs out.

Maybe someone knows who this woman is/what the prog was? I thought it was a great idea, one I may try when my boys are old enough - just wish I could try it on Mr TM. (Is there a site for Moneywastingexperts?)

Queenie

I give my children money each month which they keep in their own cash box, with a cash book.

The money is divided into 3rds:-

Spending money
Savings
Gifts

They have to tally their money in their cash books. They are very clear about what they are responsible for buying. They are aged 10 & 9 so they don't get a 'heap' of money right now.
When they reach the age of 11yo their allowance will go up to include clothing. This will be worked out based on what I spend per annum on their clothing needs.

Once I have given them their money it is theirs to spend as they choose! That is the most important part: it is theirs to spend how they choose!!

I will not bale them out.

If they wish to save for something quite large (ie a bike) then they can "earn" extra by doing extra's.

Their basic "income" is not job related (I expect them to do age related jobs around the house anyway). But they can earn extra's by doing jobs they wouldn't usually do.

One will happily spend all the allowance the day he gets it and remains "skint" for the remainder of the month; the other doesn't like spending his spending money at all and tends to put it with his savings anyway!

This system works for us. It is the same system I used when I brought up my (now adult) 3 kids.

Never underestimate the powerful affect on their self esteem when they genuinely buy a gift for whoever. Or their pride when they have saved (and gone without!) in order to get something they really, "really" wanted.

That is priceless!

maggut

My son is almost 12 now and has always been good with money,when he was small i would let him pay for his own comics and sweets and never let him eat things in shops without paying for them first.
If he wanted a toy i would say to him that he would have to save up for it.......if when he had saved enough and he still wanted it then i knew he would play with it. If however he had saved and changed his mind then he cant have really wanted it in the first place.
Last year in the summer he bought his own bike with £150 he had saved,i did say i would buy him one for christmas but he wanted to buy it himself,theres not many kids can say the same i dont think. Most kids round here seem to get a new bike every year,when i was small my bike was my most treasured item and lasted me years,as will my sons.
If you dont teach them from an early age and they always get what they want then the battle is already lost.
The funny thing is, i am a one parent family yet all his friends think we are rich because he has everything and has never wanted for anything,the reality is that he respects his things so they last a long time.
The more expensive things he wants he gets for christmas,the rest of the time he saves for them.

margaretclare

I learned the value of money by having to work for it. I suppose what you need are boundaries, so your stepdaughter knows that if she has her allowance, that is all she is getting till next week/month.

I think you're right. I think the only way of learning the value of money is when you start to work for it and earn it for yourself. You then start to realise 'so many hours spent at work when I could have been hanging out with mates/watching TV/doing whatever else it is that kids do nowadays' and also the effort involved, having to get there, having to be polite to people you might not otherwise speak to....

Getting a part-time job is, I think, of incalculable value. The actual earnings may not be very much, but doing a job for a few hours after school or at weekends has a huge effect. Nothing in this world comes without effort! You can't expect your parents to fulfil all your needs/wants for ever - they have needs and wants of their own.

But I agree, difficult if the young person has grown up with the idea that it grows on trees, and they feel they have a right to whatever they want!

Aunty Margaret

John_M_Business

My parents gave me a small amount of pocket money (about £8 - probably about £14 in today's terms) per week as a teenager, and I could choose to save this or spend it.

When it came to birthdays, there was always a budget - when I was younger (until about 10) they would buy for me, after this point they'd ask me what I wanted - I loved sport so it was generally easy to choose what I wanted. If it was more expensive, then I had to pay extra out of my savings. If I did not have enough, they held onto the money and once I had enough then they'd buy what I wanted.

They always got me smaller gifts that they had obviously THOUGHT about - and these definitely worked for me.

They NEVER gave me advances.

My son is just over one, but I will try to carry this kind of attitude through.

swizzlebabe

Thanks for all that, glad she`s not the only one.
But her mum has just given her a huge amount of xmas prezzies, which put to shame the money her dad and I gave. She has so much stuff, hard to know from one day to the next what she has. But as usual it wasn`t enough.
Her mum has maintenance, and a two income family so she can afford it.
On the other hand, we have one income and a large maintenace pymt going out.
but dad is tight ausual.

chardonnay_2

when families split up i think there can be a lot of guilt and kids tend to get spoiled as no-one wants them to suffer. i have two step-sons and we try to get what we can for them, they had loads of presents but mostly because we bought stuff in sales and i got bargains online throughout the year.

when they were younger they would ask for a £40 game when out without any concept of cost i soon got them to read the price tag and point out they only had x amount of money etc. recently they were in asda and pointed out brand new gameboy advance games that they wanted we said if they wanted them they would have to earn them. the boys then helped do diy tasks around house and garden to earn the money for them. think this is much better than just handing them something on a plate.

perhaps it's time your hubby told his daughter how much money he provides for her upkeep every month as this money is supposed to be used to provide for her. does it? or does mum use it to buy stuff from her?

Finishrich

My children are being brought up to realise that if they want something they will have to earn the money to pay for it.  It is also very rewarding to see their faces when they have earnt enough money and they finally obtain what it is they wanted   ;D

Around Easter time my 4 year old asked if he could have a fishing net 99p from the local shop. Said No, he'd need to buy it with his own pennies. We walked home and when we got there his auntie had left an Easter card and instead of a chocolate egg had put some £1 coins in the envelope. Now he was wondering if he had enough to buy the fishing net. I said Yes and agreed to walk back to the shop so he could buy it. OK so he didn't have to wait that long but it was his own money and the look on his face when he paid for it and got 1p back in change was priceless. Much better than if I'd bought it for him on the first visit to the shop.

scuzz

I never had pocket money, until I outgrew a magazine that my Dad got me every week. I then got £1.20 when he remembered! Please bear in mind I was 11 and that was only 10 years ago.

I used to save this up with any money I got for my birthday to buy presents for family and friends at christmas/birthdays.

Then when Dad gave me money for the tuck shop at school I'd save that too.

We never went on holidays abroad and went for nearly 10years without any form of holiday away from holiday. We weren't broke, but we've never been rolling in money.

I was always made to put birthday money in the bank when I was young - up until I was about 10 and wanted to start buying presents myself.

Now I'm looking to buy a house with my other half, and realise that every penny counts, so that's exactly what we're doing, saving coppers in one bottle, 5ps in another and putting aside any money saved through using vouchers and getting BOGOFs.

We have pver £200 pounds now! Won't buy a house, but it still counts towards it.

Nile

Hello Swizzlebabe

My experiences taught me the value of money when I was young. We were quite poor and me and my brother had no one to play with every summer when all the neighbours went away on holidays........we could only afford a week at Butlins (we only went twice) in all my childhood years. I didn't go abroad until I was 21 years old.

One regular experience I can remember, (while dad was at work) mum and my brother and I would catch the bus to visit nanna. Following the visit to nanna's house, mum would ask us whether we wanted a bag of chips and a walk home or use the money on a bus fare, because she couldn't afford both. We often walked the three miles home with a bag of chips each.

If children are given unlimited amounts of cash or expensive gifts without understanding how they were earned or afforded, how will they cope financially when they leave home?