Teaching kids the value of money

rushnowt

im_a_lady wrote:

i have always had a problem with my eldest son's messiness. he is 7 and i've never given him regular pocket money cos i didn't think he appreciated it. a couple of weeks ago i gave him a fiver before he went for a sleepover at a friends. his face lit up and i said to him there's more where that came from if you remember to put your washing in the basket and keep your room nice. since then he's been a different little boy and he buys us all sweets and saves some of his money too. it's great i've never had so many liquorice allsorts mmm firemans hoses-yum. i am very proud of him-but if he doesn't help he doesn't get. so far no problems tho

Hi, and welcome to the site.

Awwww thats lovely what a fab little lad ya sound to have there, well done on that, it makes such a nice change to hear stories like this, i think ya sometimes get down in ya own problems and when ya read something like this it makes ya realise that kids really are worth the effort

Janeryan

My 14 year old learnt the hard way many years ago when the Pokemon craze was on. He spent all his pocket money on cards and eventually when the craze died out we added up what he had spent & it came to £100.00. At the time he also wanted a radio control car whcih cost £100.00 and when he realised that he had spent so much on cards(and could of instead had enough to buy the car) he cried!!(He was about 7 at the time)

He has just had a pocket money increase from £1.50 to £2.00 per week but I do buy his clothes still and credit for his phone but he is not designer label concious and hardly uses his phone so it's not too bad. he just has to finance youth club subs(.50p per week) and his tuck habit at school. He has always bought presents for the family himself but has just started to buy his close friends birthday presents too-before I used to give him a fiver for presents. Interestingly he still sets about a fiver limit per child and usually manages to stick to it.

He has just bought himself a PS2 after saving all his Christmas & birthday money and we went to the shop and he counted out the £130.00 in cash to the assistant.

When we came out of the shop he said"That was an awful lot of money wasn't it?? I don't think I need to buy anything new for a while"

I think we've cracked it!!!!!

pavlovs_dog

found this article and thought it might be of interest to you all. think it contains some good ideas

The Guardian: Parents: For what it's worth: How do you teach children the value of money if you're not exactly the chancellor of the exchequer yourself?
Guardian, The (London, England)
January 1, 2003
Author: ANNE KARPF
Estimated printed pages: 5
QUICK LINKS
find articles by ANNE KARPF
find all articles from January 1, 2003

Sex? Easy. Death? No problem. But the idea of sitting down and talking unhysterically to my children about money brings on mysterious medical symptoms. It seems I am not alone. When I asked a trio of old school friends how well they felt they were teaching their kids to handle money, each insisted that they were more incompetent than the next.

"Rubbish," said one. "Hopeless," pitched in another. "Really crap," remarked the third. All four of us are at a similar stage of parenthood - where you have suddenly realised that you have not only had to shell out large quantities of money raising your children, but now they expect you to give it to them as well. Children and money - a veritable vortex.

Now the government has pitched in, launching a website (https://www.redbox.gov.uk) to teach children about taxation. But how do parents help kids distinguish between want and need if their own appreciation of the difference is just this side of negligible? How do you induct them into financial responsibility, when you can't compute compound interest to save your life? We're supposed to ease the transition from toy cash registers to savings accounts (presumably there is a parental talk equivalent to the birds and the bees: The stocks and the shares? The mortgage and the overdraft?), yet many of us feel it is a case of "Do as I say and not as I spend".

Pam Ericson, with daughters aged 20 and 11, is expansive about her failings. "I feel I am hopeless at teaching my children about money, that one should be clear about teaching them the value of it and impose discipline, but I don't have it myself." She adds ruefully, "My parents went from poor to quite well-off and they weren't very clear about setting limits. The horrible thing is that maybe I'm like them."

One problem is that the very technology of modern banking works to undermine restraint. When I am short of cash, my six-year-old barks, "Go to the bank", as if it were a perpetual flame. When your child sees you using a plastic card to get money out of a hole in the wall, you can understand why. Age does not simplify matters, either; if anything, the reverse. My 13-year-old feels guilt-tripped by my constant refrain of, "We can't afford it," but then I will suddenly announce that, compared with most of the world, we are rich. I think I am teaching them relativity; they are just confused.

In the US, there are now Money Skills kits to help parents and grandparents teach children the value of money. Naturally, these cost quite a lot. They are also a response to the fact that, in the US, children and teenagers spend about $200bn a year, and influence another $250bn of household purchases, while British kids' pocket money adds up to pounds 2.85m annually. Never before have so many children had so much (and so many others so little, in comparison).

Apparently, kids as young as four are supposed to be saving and scrutinising products to see if they are good value. Call me an old hippy, but I would rather preserve the pre-money stage a bit longer. Children have a lifetime to become good consumers; better they have a childhood where use value rather than exchange value is king. What's more, the counsel to start giving them pocket money as early as five is clearly aimed at the well-off rather than those who have enough demands on their straitened budgets without having to stimulate more. Yet, as Pam Ericson says, "If you just can't afford it, it's much clearer. Many of these dilemmas are problems of affluence." They are also problems of peer comparisons: "Mum, everyone has a mobile/Miss Sixty jeans/more pocket money . . ."

Some of the guidance is self- evident: do not use money as a reward or punishment; give children both paid and unpaid household chores, help them analyse their shopping decisions (and not by yelling, "Why the hell did you buy that?"). For a really serious cringe, check out the Children's Money World website, which presents the Moneykins, a family that makes and sells cherry cakes, spending some of their earnings but saving the rest - for a rainy day.

On one point, the advisers are unanimous: be consistent. All very well, but what if the parents have different attitudes to money? Even if parents agree on a party line, their children's attitudes might still surprise them: siblings raised in the same household can diverge widely in spending styles, as Jackie Vance's 14- and 15-year-old boys prove. While Thomas's allowance is spent as soon as given, his frugal younger brother Sam always evaluates a range of products before he chooses. Most advisers assume, then, that money is an entirely rational business, based on a cool appraisal of income and outgoings (they have clearly never been to Topshop with a teenage girl). Yet we know that money is also about feelings and relationships, that it can make us feel omnipotent, and, if we lack it, useless. And between parents and children, money is always a potential site for power struggles.

It is excruciating for parents to cede some of it and sit back and watch their kids buying rubbish. When my older daughter was given some money recently, I put half into a savings account but, to the vocal disapproval of my mother, set up a bank account for her with the rest, which we both knew would go on clothes and magazines. As it duly did.

American writer David Owen argues that to help children develop into canny consumers, they need more control, not less. "Children who have no control over their own funds have no incentive not to beg for money and then squander every dollar that comes into their hands. If your own income consisted solely of what you were able to beg from a fickle and inscrutable boss, you would wheedle, too."

Four years ago, Owen hit upon the idea of starting his own "National bank of Dave", setting up an account for each of his children using the same computer programme he uses to track his own money, offering them 5% interest a month, a vastly higher rate than the bank (no, he doesn't accept deposits from strangers). Their pocket money is credited to their accounts automatically on the first of each month, and they can make further deposits or withdrawals whenever they like. Not only have they turned into ardent savers, but they are also now proficient at averages and percentages. They may also be the teensiest bit infuriating to people like me who struggle to reconcile their cheque book stubs with the bank statements.

The rest of us tend to make do with more modest strategies. The Vance family pays half their sons' pocket money into their bank account, so that spending it requires a little more effort. Serena Browne offers to match her children's contribution on big items, like a doll's house, to encourage them to save. And Pam Ericson's 11-year-old uses her pocket money "for the things I don't approve of or think she needs".

Of course, whatever their age or income, most parents want their children to learn that there are some things more valuable than money. But culture is just as powerful as parents in shaping children's attitudes to money. Says Linnie Price, whose oldest daughter is 35 and her youngest 13: "I'm part of the post-war rationing generation. My children have a very hedonistic attitude to spending. There is something in me that does not want them to have everything they desire, whereas they are baffled by that attitude - so there is a tension, and it is very outmoded, and I sound like a pompous protestant prat."

Financial experts warn us that children who are not taught good money habits suffer the consequences for a lifetime. That is probably sound general advice, but it does not always work that way. Pam Ericson's oldest daughter, a university student, is living proof to the contrary. "There are so many shops she won't go into on principle, such as Gap and Nike," says Pam, "that she makes me feel totally frivolous."


Copyright 2003. All Rights Reserved.
Record Number: A20030103 -FD2-EIW,0,XML,EIW

terrierlady

grandson now got himself a paperound and was gobsmacked at how hard it is to earn £10.00!!!!! 3hours work infact.
Lesson learnt i think, he was telling his younger sister this morning not to waste her pocket money.

chris9

gibby wrote:

There is a guy similar to Martin but in the US

he has a book RICH KID SMART KID by R T Kiyosaki an excellent way to get your kids thinking the right way

also Rich Dad Poor Dad for adults.

available everywhere and a must as it simply shows you how to get out of debt and ahead., no matter how much you earn.

Just check out the reviews of his books on Amazon.


I would love for Martin to do this sort of stuff as it should be taught in schools etc

G

WARNING!! I would strongly advise against recommeding anything by Robert Kiyosaki on this forum. For my reasons click here:
http://www.johntreed.com/Kiyosaki.html

Savvy_Sue

pavlovs_dog wrote:

found this article and thought it might be of interest to you all. think it contains some good ideas

The article might contain some good ideas, but that redbox site was terrible! OK, I know I'm over 16 (just a little!) but it was the most boring, 'orrible, text-based creation I've seen in a long time, and you could answer some of the questions without reading the bally text above them! (Plus it referred to tax allowances for 2002-03, so a little behind the times! And if you answer a question wrong - deliberately in my case! - it doesn't tell you what the RIGHT answer is!)

Anyway, it doesn't help with money, but I've found the ONLY way to stop my youngest leaving his smelly socks in the lounge is to confiscate his cricket bat!

muddled_midget

I think 17 is quite a difficult age, especially if you've got younger brothers and sisters. You're kind of trapped between being treated as an adult by your parents, and still being treated as a kid by parents or grandparents probably in this case, so it can be difficult to know where the boundaries are. I'd ask her if she wants a girly day with just you, nothing confrontational, if she says no, just say the offer's there if you fancy it another time. If she does say yes, explain you know how difficult growing up is, and changing from child to adult, but there are certain things you do have to start taking responsibility for, and money is one of them. You don't want to be an ogre, but you don't want her to make the same mistakes you did (if you did). Also try and get her to integrate more into the family, maybe have one night a week when everyone's in and everyone has dinner together, maybe all take it in turns to cook something new and exciting, great when it goes right, funny when it goes wrong. I think what I'm trying to say is treat her like an adult, but remember she is still your little girl. Set down some ground rules that you both think are fair, no shouting at each other, she doesn't ask to borrow money, maybe you can compromise on something she's always moaning about that isn't money.
Hope things get better
midget

TurnaroundSue

When my son was little I used to take him to car boot sales and give him £1. He soon learnt that once it had been spent there was no more. So he would take ages deciding what he really wanted and looked around before making his final purchase; he became quite good at bartering too!! He is now 13 and has a paper round - monies go directly into his bank. Mind you since reading this thread, I am going to arrange for him to have a cash card, so he has more control over his finances. At present I give him £3.50 per week (50p per day) for keeping his room tidy and doing a couple of jobs around the house - deducting monies when he doesn't keep up with agreement, but I am now considering putting these directly in his bank once a month and then keeping a weekly tally of his 'fines' and making him pay me back out of his money when he doesn't complete tasks. This way he can see what it is like to pay out money for things he doesn't do, rather than not earning it in the first place!!

fluffybunny_2

TurnaroundSue wrote:

When my son was little I used to take him to car boot sales and give him £1. He soon learnt that once it had been spent there was no more. So he would take ages deciding what he really wanted and looked around before making his final purchase; he became quite good at bartering too!! He is now 13 and has a paper round - monies go directly into his bank. Mind you since reading this thread, I am going to arrange for him to have a cash card, so he has more control over his finances. At present I give him £3.50 per week (50p per day) for keeping his room tidy and doing a couple of jobs around the house - deducting monies when he doesn't keep up with agreement, but I am now considering putting these directly in his bank once a month and then keeping a weekly tally of his 'fines' and making him pay me back out of his money when he doesn't complete tasks. This way he can see what it is like to pay out money for things he doesn't do, rather than not earning it in the first place!!

just read this and I like it!

xxxdarlingxxx

My mum had a list in the kitchen of jobs. Some had no money beside them and some had a good value.
To earn any of the value ones I had to do the free ones first.
So....
Only by keeping my room clean & tidy, doing my homework, being a bareable child (no cheek) could I get a chance to earn some cash.

I valued the money and the opportunity to get it.

Worked for me & kept my mum sane (just) !