How to teach children about money management?

dreamerinfate

Hello

Great post! I myself have had money problems and i wish i had learnt about money management at school etc, i have heard now they have introduced this into schools which personally think its great!

You could try getting them to save, howabout sitting them down asking them if they have anything in mind that they want, like something big, a toy, a game console etc and asking them if they want to save and buy it themselves and set a target date, even if its 6 , 12 months etc

In my opinion if they are seeing the money grow and able to buy themselves something nice they are seeing it as a reward and also they are saving themselves. Imagine how they feel when they can finally buy the big thing they have wanted for a while and bought it themselves!

You could also try and get them to chores etc and pay them a small amount whether its 50p, £1 etc ( not sure how old your children are though)

Another option would be the same sort of idea and getting them to save half of the pocket money they receive and put it in a bank, i myself loved having a cash card/bank book when i was younger as i felt important and grown up at the time! Although i admit i wasnt allowed it to myself until i was 16, They could spend half save half , that way they are getting into saving and still able to spend a little.

I wish i started saving early, i did have an account although as i got older and needed clothes, make up, nights out i just spent it even when i got a job i just thought ooo more money to spend, big mistake! Plus my grandparents always gave me money which yes was nice of them but probably a mistake really!

mumps

When my kids were 11 I got them a bank account with a debit card. Every month I paid their pocketmoney in, they were given money for school dinners and some money for bus fares. They could then decide to make sandwiches, bread and sandwich filler at home, and buy extras or save money, they could save up for terms bus pass, I bought the first one to get them started, or pay by the month which was slightly more expensive, or walk/cycle and save the money.

Their pocketmoney was low but they could make it quite generous by doing the moneysaving bits, up to them. Sometimes they would have school dinners if it was something they liked or they got up to late to make sandwiches, if they were saving for something special they would be more motivated.

They all messed up to some extent in the first year but became expert at managing their money and has stood them in good stead.

enthusiasticsaver

Great idea trying to teach your children about money management and even though they are young there are lessons they can learn at this early stage. Both our daughters had savings accounts from when they were babies and up until the age of 11 we focused on them having a small amount of pocket money for sweets, toys, books etc etc on a weekly basis and a similar amount went into their savings account which they paid in by saving in a money box and then paid into the account each month.


From the age of 11 they both had cash cards and clothing allowances paid from child benefit and school trips and clothes and entertainment had to be paid from these allowances. If it was not there they could not do it. They both had jobs from aged 16 and managed their own wages plus the child benefit until University. They learnt the value of saving up for things - rather than instant gratification and of budgeting. I also drummed it into them that credit is not something they should take out, except for 0% and that an emergency savings account was a necessity. They have never got into financial difficulties and budget every month which is a skill everyone should have.

ReadingTim

If your in laws are giving the kids too much money, then why don't you simply take it off the kids? Literally - take it away. The tax man does that to you and I every month, and kids need to learn that life isn't fair, and they can't get what they want every time.

I'm being slightly provocative here - you don't take it away and keep it - you pay it into their bank (they do have bank accounts don't they...?), or make them do it themselves so that they get into the habit of saving. Sometimes you have to be a little cruel to be kind, and you need to be a parent, not a kid's best friend.

greensalad

I have to agree that with grandparents it's different. Hard lessons from Mum, treats from Grandma, that's how it went for me!

Anoneemoose

Thanks again for all of the comments.

ReadingTim - I agree to a certain extent..and I am most certainly a parent and not a best friend! There is only this 'issue' and to be fair, it is only in the last 18 months or so where they have been give so much. They used to get pocket money that we put in the bank for them (before they were old enough to really want anything). That money is still there. Then my mother in law steadily increased the amounts to where they get £2.50 ish a week, given when it reaches £50.

As I say, hubby and I are going to speak to the in laws and ask them to give them it weekly or even monthly. We will insist on them saving some in the bank and then encouraging them to think about what they want to spend it on.

Reya

Anoneemoose wrote: »

That money is still there. Then my mother in law steadily increased the amounts to where they get £2.50 ish a week, given when it reaches £50.

I think you're right to ask the grandparents to switch to a weekly (or even fortnightly) payment of pocket money. If that figure quoted above is for when the money reaches £50 for each child, at £2.50 per week it would take 20 weeks to accumulate that much. Thus, when it's given, it takes on a special 'treat' significance - a bit like birthday money or Christmas money - rather than a weekly allowance.

The kids might find it easier to save if they put aside £1 of their £2.50 weekly allowance (because they'd still have £1.50 - more than half the allowance - left) because the 'accumulated' equivalent would be to save £20 of £50 (and when you're young, £20 sounds like a lot more to 'lose' to the piggy bank than £1!)

lesbro

My son knew about money from the age of 4. We took him to Butlins on holiday and gave him 20p to spend in a sweet shop. The items were laid out along a counter and he chose his sweets. When he reached the cashier he gave her the sweets and his 20p. She was astounded as it was the right money. I must admit we were just as surprised as she was.
He was taught by us to know numbers and the value of coins.