Off the back of our post on Radio 4′s Bringing up Britain episode on Money Matters, here are a few tips from Roosterbank HQ on teaching kids about the value money and managing it well.
Teaching with pennies will prepare them for pounds:
As with anything, start small before going big. The earlier you can get children into handling money – which can just be counting out combinations of 1,2 and 5p pieces, the greater their understanding will be. It also means that if they learn to look after the pennies, as the old adage goes, the pounds will look after themselves.
Make them earn:
If you give your kids cash at the shops without any guidelines, you are not incentivising them to really think about where the money comes from and the importance of spending it (or saving it!) carefully. By either making them earn it through a Reward Chart or doing odd jobs, they will understand that it has a value.
Help them learn:
Help your children understand the difference between a good and bad purchase but letting them make decisions about what to buy. That doesn’t mean you can’t give them advice on whether one thing is better than another but ultimately, if they make the decision to get something that falls apart a week later, then they will have learnt the hard lesson for next time. Suing something like Roosterbank where kids can choose what to save for – whether online or in the shops – and puts them in charge of saving for it, will teach them to take charge while under your watchful eye.
Teach the difference between Needs and Wants:
Everyone may want an Xbox One but do they need it? Food is boring to buy when you’re 8 but everyone needs to eat. Having a conversation with your children about whether they need something will help them determine what is a luxury and what is a necessity and is a great introduction to budgeting. This could be simply a game – divide everything up in a room into ‘needs and wants’ or if they really want something, get them to work out how much they need it and then encourage them to save for it.
When it’s gone it’s gone:
Something we talk about in our pocket money tips resources but a really important lesson is to understand that once pocket money has been spent, there isn’t any more. This is one of the best means of teaching kids the value of money and the importance in keeping hold of it.