With an increasing number of first-time buyers relying on the ‘Bank of Mum and Dad’ to help them get on the property ladder, teaching children to save and understand the value of money from an early age has never been more important. No matter how young or old your children may be, we have put together a number of handy tips that will help make them savvy savers in no time!
Letting young children see and handle coins and notes regularly is the best way to get them used to money being a part of their everyday lives. To help them learn to understand the value of money, raid your money box and stack piles of coins next to each other, using the various coin denominations, until each one equals £1. Once you have completed this, take the piles down and ask your child to rebuild them.
Plan a family day out and list all the things you’ll be doing including food and transport. Work out a realistic budget for this and withdraw the cash. Let your child count and hand over the money whenever you do an activity that requires money – If they want to do something that you haven’t planned for, explain to them that there may not be enough money to do this, as well as the other things you have planned.
Give your child a £1 to spend on whatever they choose in a local shop. Ask them what they want to buy and if they can afford it. If they are struggling, take them to an area in the shop where you know they will be able to buy something for this amount, and ask them what they think.
The best way to get children to understand the true value of money, is to let them save and spend their own cash. Work out a reasonable amount to give them each week, maybe get them to help you out around the home to earn this, and let them decide how they spend it.
Buying them a moneybox or opening a bank account will also give them somewhere to store their savings and teach them that money needs to be looked after and kept safe – For teenagers, gradually increase their allowance so that they can learn to budget for their toiletries, clothes and social activities.
Talk to your child about saving for something they really want and help them work out how long it would take to buy it. If it’s a fairly expensive item, why not agree to pay a certain amount towards it, if they save the rest?
Planning and budgeting is particularly effective for older children. Getting them to plan an event from start to finish, detailing everything involved including; activities, food, drink and transportation, and working out how much it’s going to cost, can help them realise if it’s affordable and if anything can be done cheaper.
If paying on a debit and/or credit card is your family’s preferred method of payment, it’s important to familiarise your children with how this works also, so that they learn that money isn’t free! The best way to do this is to let them see you paying for something on your card and then showing them your bank statement after, so that they can see the money leaving your account and your remaining balance after.