Trying to teach your children about the world of money may seem like a daunting task, but it is an important one. A study from the University of Cambridge has found that adult money habits develop by the age of 7! It shows the power that parents have to shape their children’s monetary habits, which can and will affect the financial decisions they make throughout their lives.
We have compiled a list of ways you can teach your kids about money for all ages and how to make it fun and enjoyable for them.
Let your Children Know about Money from an Early Age
Starting to teach your children about money as much as you can will benefit them in the long run. Teaching about money does not have to be a discourse, children take life lessons from their own experiences and from games and movies.
Jobs and pocket money
Completing age-appropriate jobs in order to get your children’s pocket money is something you can start relatively young at, and it helps to cultivate the idea that you have to work for money. Things like looking after themselves neatly, putting toys away, helping with food, and cooking as you age can be simpler and more responsible.
Piggy Bank Savings
When your child is earning their own pocket money, a piggy bank is a great place to start collecting it. Using a clear jar instead can be even more impressive because you can see the improvement they are making when they add money to it. This is a great way to motivate kids to save and work on short term cash goals.
Take Kids Shopping
Taking your kids with you when you go to the supermarket is a great way to start a discussion with your kids about food costs, branded products and prices.
You can make it a challenge! In a week, buy an unstamped item of an item and compare the following with the branded version you bought. Can you taste the difference? Is it worth the extra cost? This will help them develop sensible shopping habits and teach them to consider whether something is really worth the extra cost if they have a cheaper option. Excellent bargaining power!
Kids can buy themselves
If you find your child wants something like a small, affordable toy and they have some money in their piggy bank, let them buy it themselves. If they physically take the coins from their own piggy bank and hand them over to the cashier, it will have a greater impact. Ask your child if they want to buy, or save their money to buy something else. They think more about whether they really want it than someone else buys it for them.
Playing “shop” or “cafe” has always been a popular game with children. The next time you play, try to incorporate a real life cash feature into it by pricing all the items and setting a budget to show that you cannot always buy everything.
In the movie up, a couple named Carl and Ellie save together for their adventure, only to discover that they really need to spend money on “life going on” moments. But the moral of saving what you want in life is clear. Charlie and the chocolate factory are another good one, initially you see Charlie and his family living in poverty, but in spite of all the trials he thinks that money is more important than what he enjoys while in the factory. Sign up for a 7 day free trial with Disney + to see these pictures (and more)!
There are also a few cash-themed board games:
Pop to stores 5 – 9 years old, it helps kids learn about cost, buying items and change.
Monopoly is a classic! It also explains your role in banking, tax payment and contributing to the community and what happens if you are unable to pay.
Game of Life follows your ‘life journey’ and gets paid in wages, but you lose it when you pay rent, to put an end to unforeseen circumstances. The winner is the player with the most money and “life tiles” at the end.
Older Children and Teenagers
Teach your children about money in other ways as they get older. Send them more responsibility for their own money and introduce them to ideas for long-term savings goals, bank accounts and social responsibility.
Open a bank account
Savings Accounts and Junior ISAs are great ways for your children to gain a better understanding of long-term savings and how different accounts and interest rates can help their savings grow. Introducing the concept of collective interest to your children can be a bit challenging, but using a real-life example and showing them how much money they can save and how much they can earn from it can help.
Children’s savings accounts often have the best interest rates of up to 4.5%, so setting them up as an account will encourage them to make regular deposits to see improvement and develop good savings habits.
In the UK children are legally allowed to work from the age of 13, but there are rules about how many hours they can work and when.
Use your own judgment when you think your child is ready to look for a part-time job or a weekend job, but encouraging them to do so is a good idea. Giving up their free time to make money will make your child overestimate the value of money and appreciate how much effort and effort it takes to earn a certain amount.
First credit cards
Before your child reaches the age of 18, you can give them their own ‘credit card’ in the form of a prepaid card. Ask them to give you a portion of their pocket money or Saturday work return and load it on the card for them. When it is spent, it is spent! Even if you can’t find the body money handed out in stores, it’s still a great way to teach them how to spend it your way.
When your child turns 18, they can apply for a basic credit card. The limit can be very low, minimizing the risk of excessive spending. If they are going to UNI, the credit card may also help them with budget expenses.
In addition, it will be their first credit line. If they use the credit card carefully now and pay it in full every month, it will work wonders for their credit score. What this means is that when it comes time for a mobile phone deal, broadband deal or their first home purchase, they will be in a strong position.