Teaching children about the value of money

How do you teach your children about the value of money?

According to research carried out by icount recently over 40% of parents surveyed felt that children should be taught the value of money between the ages of 5 and 7.  

Personally I think you need to start even sooner.  From a very early age we’ve talked about the value of money to our children.  For example, if they want a treat from a gift shop at the zoo we might explain to them that there isn’t any money for the gift shop as we spent lots of money on the entrance tickets or, if we’re feeling a little more flush, that they must choose between an ice cream or gift shop money.  This makes a clear point that you can only spend your money once.  Mummy and Daddy don’t have a free flowing stream of money (if only) and we have to make decisions about what we want to spend it on.  Giving them choices about how money helps them to understand how you must prioritise what your funds are spent on.  It also means that we rarely have tantrums or strops if we say we can’t or won’t buy something – they just understand that the money isn’t there.

Last summer we had our first family holiday abroad and we were often heard to be saying “We can’t do that as we need to save all our pennies for France” or “Yes you can use your money to buy those sweets if you want to but then you won’t have any spending money on holiday”.  We were intentionally teaching Ben and Chloe in particular, that you need to make sacrifices to save up for something you really want.

More recently we encouraged Ben to save up to buy his own bike.  Of course the £70 or so we spent on his new bike is a lot of money to save at 6 years old so as an added motivation we told him that we’d pay half.  If he could save up £35 for his bike, we’d pay the other £35 for him.  Through a combination of saving up money from his grandparents, the tooth fairy, doing jobs around the house and even the odd penny or two from Grandad Joe, he saved up his half in around 6 months.  He had to work hard for his bike and he was so proud to have paid for it himself.

Clearly, teaching children about the value of money isn’t just about learning about how much things cost, though again this is something we talk about often.  Ben in particular, at 6, is able to understand when I tell him “The tickets for this pantomime were really expensive, they cost more than your new bike” and I do think it gives him an increased appreciation of how expensive things can be or how hard we have to work to provide them.  When he asks to buy something naff in the supermarket and I tell him that for the same money he could have a box of LEGO he soon changes his mind about where he wants to spend his money!

Interestingly a large number of parents surveyed felt that the best way to teach children about the value of money was to give them their own pocket money.  This isn’t something we actually do yet as I think our children are still too young, however having responsibility for a small amount of money certainly does give them the opportunity to learn about saving, budgeting and managing their money.  I remember in my early teens getting the bus into York with friends and writing lists before I went of what I would be spending my money on – the bus, a sausage roll from the bakery, a new top.  I was already learning to budget.  (Unfortunately it wasn’t really a lesson that stuck into early adulthood).  As a teen, my Dad would pay me my pocket money by monthly direct debit – mainly because he would forget otherwise but also because making your money last all month is a good lesson to learn for when you join the working world.  Both Mum and Dad were keen that we were never allowed “subs” – if we had run out of money, we had to wait until our next pocket money was due.  There was never any borrowing.  Again, a tough lesson to learn and one which I wish I’d internalised more!

I’d love to know how you teach your children about the value of money?  Do they have pocket money?  How do you encourage them to save?

*Collaborative post*

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8 Comments

  1. May 24, 2016 / 9:37 pm

    Working in a bank and growing up with no money as well as having our own journey of getting out of debt I have thought from the start how important it is to teach children the value of money. I try to explain how much things cost to Athena in ways she'll understand and she has to use her piggy bank money when she wants extra treats. If we just bought everything for the kids they would never learn about working for it, saving for things and the true value of anything x

    • May 25, 2016 / 6:01 pm

      I completely agree Donna. It's a hard lesson to learn.

  2. May 25, 2016 / 6:08 am

    From a young age parents should start teaching children about money management and responsibilities. By the age of five, most children are able to do small tasks around the home in exchange for a cash allowance. As kids grow, they are able to more difficult tasks. At a young age, tasks could involve caring for a pet, or weeding and watering the garden.

    • May 25, 2016 / 6:02 pm

      Most definitely. Ben has a mixture of tasks we expect him to do as part of being a team and other additional ones for which we will reward him with small amounts of money to save.

  3. May 25, 2016 / 9:58 pm

    Our children have always had to work for their money, we never did pocket money but we are not short of fun jobs to be done on the farm. #sharewithme

  4. May 27, 2016 / 11:07 am

    I love it, it's so important for children to learn to work hard for something. These are valuable lessons you are teaching yoru kids and we've always done the same. My boy first iPad at age 9 as he instructed everyone to give him money rather than presents for his birthday and Christmas. Mich x

  5. May 31, 2016 / 9:39 am

    The children don't have pocket money but they do save stars that they are given and exchange them for money they can save or spend. My second child is fantastic at saving his money, my eldest likes to shop and the little two just know you need money to make the peppa pig ride work lol. Great post. Thanks for linking up to #sharewithme do join in again 🙂

  6. June 7, 2016 / 7:15 pm

    I think its so important to teach our kids as young as we possibly can about money, saving and how we should use it. We haven't started pocket money but do talk about the difference between family contributions which are things to help around the house to care for the house and family that aren't paid chores and anything extra they will get pocket money after that. 🙂 That's the theory anyways. lol We shall see. Apologies for the late commenting the hand over of Share With Me to Mummy Fever and the busy half term has me a little behind but never forgetting your amazing support and thanking you for linking up. I hope you will link up again tomorrow for another great round of Share With Me over with Charlotte and keep Share With Me blog hop going long after my hosting. #sharewithme

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