You are your child’s best teacher when it comes to money.
You don’t need to be a money expert, you just need to start including it in daily conversations - keeping it simple, fun and right for their age.
We’ve put together our top 10 tips for teaching your children about money.
You can start talking to children about money as early as age 3. Bring conversations about money into everyday activities, like shopping. Give a reason when you have to say ‘no’ and explain the choices you are faced with - tell them that you can’t buy the sweets now because you’re saving for a family holiday. An explanation helps them learn that there isn’t enough money for everything and sometimes difficult choices have to be made.
Play and learn
Set up a shop and take it in turns to be shop assistant and customer. Explain how it works as you go along. One parent told us about her son being an excellent salesman, even offering her samples and discounts! Play board games with older children that are based on financial or other life choices, such as Game of Life, Pay Day or even good old Monopoly. You can also find fun games online for 7-11 year olds or for teenagers.
If you are able, giving your child pocket money provides a good chance to talk about money and what you can do with it. It instils the idea that when money’s gone, it’s gone – it’s clearer when it’s their own money being spent.
It’s not always easy taking your children to the supermarket, but it can be an opportunity for them to learn. Maybe they can help you make a shopping list in advance - and make sure you keep to it! You can challenge them to compare different prices for similar items –which box of cornflakes is cheaper? Talk to them about brands and marketing, and whether or not that ‘special offer’ really is such a good deal.
'But Mum, everyone’s got one! Why can’t I have it?' Children are influenced by advertising on TV and the internet from an early age, and inevitably want the same things as their friends and peers. Think about your preferences too – do you favour a particular clothes designer or tech brand? Be aware of how companies are trying to sell us things; talk to your children about what brands are and why a name is sometimes just that – it doesn’t mean that an ‘unnamed’ product isn’t as good.
Helping others can be rewarding, so talk to your children about charity and donating to a cause. Telling a story helps to make it relevant to them. One parent told us their child didn’t understand why they wanted to give some of his clothes and toys to a charity. Then he met a boy at school who was a refugee from a war zone – he heard his story, and then he wanted to give his things to the mosque so they could be sent to Syria.
Talk to your children about your financial goals. If you want to plan and save up for a family holiday then get them to take part. Make a motivational poster together, or have a visible ‘holiday savings’ jar so everyone can see their savings building up.
Get them involved
When making a financial decision like buying a new sofa, involve your child in the process you go through. Children learn through observation as well as instruction. Although they may not understand everything, by observing, your child will learn how things are done and that making financial decisions requires careful thought and time.
Children want birthday parties and you might feel guilty if you can’t afford to have one. It might be a bit more difficult at the moment, but holding a joint party with children who have birthdays close together is one way to spread the cost. If it’s a summer birthday, have a picnic party in the park so you don’t have to hire a venue.
As children head towards secondary school they’re likely to ask for a mobile phone. What age they get one is up to you, but you can start to talk about money and phones. How much do they cost? What’s the difference between a contract and pay as you go? What if they use up their credit? What happens if they lose it?
Are you trying to improve your own financial habits? Start small and link the habit to an existing routine. For example, if you want to save more, try putting a jar by the front door and drop a coin into it whenever you come home. If your child has a jar too, you could have a saving competition – and remind each other to keep dropping the coins in!