How Can I Teach My Children About Money?
Please remember this is not financial advice!
☎️ Today, we answer a question from our listener Alexandra, who asks us about teaching children about money. I invited Helen Driver, Director of Collaboration at MyBnk charity, ex-fund manager and long-time Vestpod, to offer us her words of wisdom on the topic.
💸 Money can feel like a taboo in a lot of households, but it’s important to broach the topic to help children feel financially confident in their futures. Helen shares 3 tips to help children develop better money habits, from making the right choices in the day to day to managing pocket money.
💥Today on The Wallet:
1️⃣ It all starts with simply integrating money into daily conversations with your kids, so Helen gives examples of how we can do that without making the subject too weighty.
2️⃣ Pocket money is a powerful tool for learning about money, and Helen talks about why it’s important to let kids simply experience the process of spending and saving (and make mistakes along the way!).
3️⃣ Children learn by watching and listening to the behaviours that they see around them, and Helen explains what this means for parents and their own attitudes to money.
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talk about money openly and often
It doesn’t have to be a big, separate conversation about money — you can work it into day-to-day experiences. For example, talk to your children about their choices, eg. the cost of ice cream from an ice cream van vs. the cost of ice-cream in a supermarket. Simply drawing their awareness to how much things cost, and the decisions you might make as a result, is a good place to start.
Ask them questions. For example, in the supermarket, you might ask your kids, “which do you prefer?’. Simple prompts like this will help introduce ideas about costs and choices — a sort of budgeting 101 for young children.
Explain the boundaries to your children and don’t underestimate what they can understand. Explaining why you’ve set certain limits might not always work, but if you do it regularly it will eventually seep into their consciousness.
let them play with their pocket money
There’s no right or wrong when it comes to how much pocket money you choose to give your children. The important thing here is to let them experience money for themselves.
Making mistakes is a part of it! Just because your children have pocket money doesn’t mean they have to save up everything they receive. It’s not just about saving, it’s also about spending, experiencing, and learning.
Pocket money is a powerful tool for learning about money and learning about what’s important to a child. You might have a natural saver, or a natural spender. As a parent, don’t worry too much — luckily, at this point, you’re only talking about small amounts!
Pocket money doesn’t necessarily have to be formalised. For example, you can give a child £1 when you’re at the shop, and let them choose something within that price range.
be aware of your own BEHAVIOURS
Children learn by watching, listening and copying the behaviours they see around them. For example, if you’re always buying things and have little self-control, your children are likely to replicate those behaviours.
Set a good example, but don’t beat yourself up about making mistakes! Having the awareness is an important first step.
You can follow and connect with Helen:
- MyBnk
Resources mentioned in the episode: