Teach your kids the value of money

Saving was second nature to our grandparents’ generation, and teaching our children how to save is a valuable lesson for them. These tips will teach your child how to appreciate their money, while improving their maths skills.

 

According to new research by MoneyforMums.co.uk, 45% of UK parents are encouraging their children to start putting aside pocket money from a very early age.  The experts at MoneyforMums.co.uk have teamed up with MyChild to provide some useful hints and tips on how to approach the topic of saving with your little ones.

 

1.    Introducing Money

 

Familiarise your children with money early on by collecting coins and engaging in activities such as looking at the different coins together, practising naming the coins and sorting the coins by colour or value. (The primary maths worksheets on MyChild have plenty of counting exercises to try too.)

 

2.    Money doesn’t grow on trees

 

When children start to become aware of money, it is often a good time to explain to them where it comes from. Many children think it comes from Mum and Dad’s pockets and don’t realise that it has been earned through hard work and that you can only spend what you earn. That’s a good money-saving lesson for kids!

 

3.    Pocket Money

 

Pocket money is a great way of teaching kids the value of money and introducing the concepts of earning and saving.  Pocket money can either be initiated as a set amount of money a week or you can give your children the opportunity to earn money through chores such as 20p for tidying their room or unloading the dishwasher. The trick with pocket money is to be consistent, if a child runs out of money during the week don’t give them anymore as they need to learn that once it’s gone, it’s gone.

 

4.    Make saving a habit

 

It’s good to get children into the habit of saving from a young age. This way when they are older and need to save for a car or a holiday themselves, this skill will come naturally. Encourage them to save by talking about the things they want to save for such as a new toy or a bike.

 

If you have more than one child introduce a competition to see who can save the most amount of money over the course of a few months, comprising their pocket money, birthday money and money from relatives.

 

5.    Play Games

 

Many young children love make believe games. Encourage them to play shopping games where you give them a certain amount of money and ask them to select items which they believe they could buy for this much money. E.g. £2 could buy them a pencil case or a magazine. This will help to familiarise them with the value of certain items. The free maths worksheets on mychild.co.uk can also help children to learn counting skills.

 

6.    Shopping trips

 

When out with your children point out the price of items to them.  Again this will help to familiarise them with the cost of certain items and different brands. You should also let them pick something that they can save for. This will help to give them a goal and motivate them to save their money.

 

7.    Luxuries and necessities

 

Highlight the difference between luxury and necessity items. Necessities are things such as food and petrol. Luxuries are goods such as computer games, holidays or TV’s which cost more and can only be bought once the necessities have been taken care of. 

 

8.    Introduce the concept of banking

 

Once your child has a grasp on the value of money and the importance of saving, explain how adults use banks to store their money and to save.  Open a bank account in your child’s name where they can deposit pocket money and Christmas money.  Encourage them to review their account and watch their savings grow until they have enough to buy something they want. 

 

9.    Explain the difference between saving and debit

 

Explain the difference between a debit and credit card.  A debit card is a way of accessing your money held in the bank so that you don’t have to carry around lots of cash and coins.   Whereas a credit card is a way of borrowing money that you have to pay back.  Ensure that they understand that cash machines don’t give out “magic money” – it’s money that you’ve earned.