How to teach children about money management?

AspiringButAnxious

Anonee — since they are your kids, I think you should have ultimate control of their pocket money while they are young. I know this can be difficult if they are given money by their grandparents when you're not there, in which case you have to put your foot down and tell them to respect the values you are trying to teach your children. Personally, I think letting them spend £10-20 of every £50 is a good compromise, then the rest can go into a savings account.

My mum used to put birthday and Xmas money into a savings account when I was little and I'm glad she did — it meant I could use part of it to go on a school trip to Disneyland Paris when I was 14 I think having long-term savings that they can decide how to spend when they are teenagers is invaluable: it teaches them the value of money and the value of having savings. It could be a good pcoket money strategy when they are older, too — you could put half in the savings account and half in a current account or cash.

I know it's awkward to bring up this stuff with your in-laws, but they should respect you and how you want your kids to be treated. Just as you might have a rule against smacking, it's perfectly acceptable to have a rule against them giving the children large amounts of money or toys.

Anoneemoose

twiggy86 wrote: »

One thing which I liked growing up was that I got a clothes allowance of x per week, which meant that when I wanted something expensive I had to save for it. I'm sure they bought essentials but say I wanted a pair of kickers (yes they were cool back then!) I had to save up but it meant I got what I wanted. Yes I got into debt so maybe it didn't totally teach me(!) but I now do the same thing for myself!

I just saw the bit about Kickers..I had them too and had to do the same..I also had 'pods' that had to be a birthday present. They were the height of fashion!!

FBaby

In my experience anything below 10 years old and money management is a bit pointless as they don't really comprehend the difference between a fiver and ten grand.

Money management is not just about counting, it's about values. I started talking about the value of money to my children when they were little. It was really nothing more than incorporating in normal conversation from the moment they started asking questions. I remember the time when by boy was only 6 and I was telling him to wait for something because I was renewing my insurance on line which prompted him to ask what insurance was. He really made me laugh when a few days before, I was struggling to open my wallet in front of the Tesco cashier, and my boy asked if I had insurance for it!

I started talking to them about the difference between a credit and debit card when they were about 8, budget setting around the same time, and my daughter started to ask about deposit for a house and mortgage when she was about 12. It's just them being curious about adult life, so they are not bombarded with info, but money talk is everywhere, in the news, friends, talk between partners, so it is easy to discuss it naturally.

OP, I have that same issue with my parents who love to spoil the kids with money and like you, it is hard to tell them not too. They do it three times a year, Christmas/birthdays/summer hols. What I have told my kids is to use the money wisely because if they are able to spoil them, it is because they have worked hard all their lives to enjoy it and it is money they could chose to spend on them rather than giving to them. They have also learnt to make a real effort to thank them, a drawing of what they bought when they were little, now a nice note and photo.

So far, both are showing a good work and money ethic. Despite earning a good income, we are not money spenders. I refuse to buy any item of clothing over £20, shop in charity shops, always look at best price. The kids seem to be growing to have a similar attitude.

crazy_cat_lady

I have always been very open with my kids about our money situation, and that we simply can't afford everything that they want, and that if they really do want something then they need to save up and buy it. They also know that Santa is doing a job at Christmas and that we need to pay him to do his job, and therefore will only bring things that mam and dad can afford to buy. I think it works reasonably well, but there is a lot of difference in my two already. My DD is a real savvy saver and spender, whereas my DS has a terrible attitude of wanting everything now, and spending his cash as soon as he gets it - even if that means that he can't afford stuff that he needs to be saving for. They get pocket money every week in return for doing their share of chores around the house.

theoretica

Even at six I could give an honest answer to 'how often will you use it/wear it' and was asked this a fair bit. It took me a little longer to realise that the answer 'not much' usually meant I wouldn't get things!

If grandparents are giving more pocket money than you want them to have, and want it spent rather than could you increase the number of things that the kids have to fund for themselves? Bikes, tennis rackets, coats, violin, satchels... I remember even buying my own toothpaste for taking to sleep overs while I was in junior school. Which would free up more money for you, to put into savings if you want.

ViolaLass

If my daughter were the age of your children, I would have no issue with taking the £50 from her and saying she could have this much now but that much must be saved.

DandelionPatrol

It might on the face of it seem unkind, but allowing them to want things that

• they can never have
• they have to wait a long time for

is a valuable introduction to the realities of adult life.

bossymoo

My eldest is 6 and I give him £1 a week really to get them used to handling money etc. Over the last year he has gone from spending immediately to spending every few weeks to now saying he's not spending anymore unless he's saved enough for a Lamborghini:rotfl:

My inlaws get them lots too although I think that is also diminishing as they get older - they don't give them pocket money unless you count €10 when we go on holidays. But having that conversation is hard. I'm not convinced spoiling by grandma ruins a child anyway, the values given at home have much more impact xxx

Anoneemoose

Thanks again all! Really appreciate all the points of view, which I do agree with anyway.

As I say, my kids aren't brats or spoiled in a bad way, and they don't necessarily expect things, but they are 'used to' having things bought for them and I really feel like it won't stand them in good stead for the future.

I agree that they need to 'want things' and aspire to get them by saving, if possible.

I have decided to approach the grandparents to see if they will either give them the pocket money on a weekly basis - that way, they can choose to spend or save and will realise that it isn't never ending! Or, if they do save it up, then to save half and let them spend half.

thegreenone

I think that's a good idea. Perhaps emphasis how helpful it would be to save for driving lessons, cars, help at university so debts are kept to a minimum, gap years, travel, house deposit - the list is endless so try and pick things they would go for. If your parents in law have specific goals spelt out to them they may be a little more helpful.