As any parent knows, kids grow up so quickly and before you know it, they’ll be taking their first steps into the world, as responsible adults.
And, as parents, role models and everything else that comes hand in hand with taking care of your favourite little people, it’s important that they are fully prepared and equipped to be independent people without having to rely on mummy and daddy – particularly when it comes to money.
Like many kids, my children are full of wants! If it’s not the latest toys they’re eyeing up, it’s every packet of biscuits, sweets and whatever else they can get their hands on in the supermarket aisles... I’m sure at times they think that money grows on trees.
But their endless wants got me thinking… do my kids actually understand the value of money? And I don’t mean giving them a complex lesson in economics but even teaching them good financial habits when it comes to daily spending can make it far easier to say no, because they understand why.
Keen to instil positive behaviours and attitudes towards the way my kids approach money, I started to do some research into how I could go about helping my little ones to understand the value of money. Here is what I found out...
Playtime should be educational and fun!
Role play is a great way of teaching kids, especially those with a short attention span. After all, sometimes kids will only hear what they want to hear, so getting them actively involved in role play is far more likely to stimulate their thought processes and change their attitudes and behaviours than sitting down and talking to them.
Playtime is the perfect opportunity to introduce role play in a fun and engaging way. My kids love playing shops, and it’s a great way of teaching them that everything comes with a price tag, and if you don’t have enough money, they simply can’t have it.
I get them to count out the money of each item that they want to buy, and if they don’t have enough money, it goes back on the shelf. Other real life scenarios that are perfect for helping your children to become familiar with spending situations include paying for a bill in a restaurant or buying a toy in a shop. If you make it fun, the message will soon resonate with your little ones!
When it comes to money, it’s important that your kids are prepared for the adult world (after all, it can be a scary place). With this in mind, it’s vital that they have the knowledge to be able to make wise money choices when they grow up. After all, the last thing you want to happen is for them to face financial difficulties that could cause them problems when they apply for credit when they are older.
To avoid this from happening, a good approach to take is to introduce them to your own credit report online. By talking them through it, it will help you to explain how their actions as young people could impact their chances of gaining credit in the future for those milestone purchases including cars, houses and other high value purchases. You can find more information here: http://www.experian.co.uk/consumer/experian-credit-report.html.
Introducing your little ones to pocket money can be a great way of embedding an understanding of the value of money into their mind-set, helping them to budget, spend and save in a responsible way.
The amount of pocket money you give your children is entirely up to you, and will vary from family to family, but it’s important that you stick with what you can actually afford.
Even giving your children £1 or £2 a week in exchange for them doing a simple chore or being good, will help to teach them to understand the concept of money. Pocket money is a particularly good tool for when your little ones become teenagers, and they want the latest trainers, gadgets and clothes as it teaches them they have to save for what they want.