How to teach your children about money management

November 19, 2021 • Lewis Goldsbury

What did home-schooling over the pandemic teach us? That some things are better left to actual teachers!

But, as many of us know from our own school days, we’re actually taught very little about money and 86% of employers believe that school doesn’t prepare young people for the real world.

Intentional or not, learning starts at home. As your child grows up it’ll be you that introduces them to the world of money. Educating your children about money management earlier in life can be beneficial. By teaching them about the value of pennies, you’ll be helping to set them up for success later in their lives.

Read on to learn how you can do this and why it’s important.

Use clear piggy banks or jars

Saving can be difficult for children to wrap their heads around. Especially if they can’t see it happening.

As cute as some piggy banks are, it’s best to stick to a clear one, or better yet, a clear jar! That’s because, once your kids have dropped their money in, there’s no way of knowing how much is in there. It falls into a dark abyss. But if their money is in view, it’ll allow them to keep watch and to see it grow.

You can also trade smaller coins for bigger ones. Or five-pound coins for fivers. Helping them to understand how every penny counts and adds up to something more!

Model healthy relationships with money

Children learn by watching us – even the parts of us we don’t want them to copy. This can include our money habits and money management.

Consider setting good examples rather than attempting to explain the value of money. For example, take your child with you next time you go food shopping. Ask them to manage the shopping list – letting them tick everything off for you. Make sure you avoid adding unnecessary items into your trolley that aren’t on the shopping list too. This will help to explain the importance of sticking to a set budget.

And always remember to be mindful about the language you use around money in front of your child. Let’s say they hear you worrying about finances. They may start to associate money with negative emotions which it shouldn’t be!

Show them the value of money

When it comes to teaching children, it’s often best to show, not tell. Children’s brains aren’t wired to digest large chunks of information. Especially not something as complex as money management!

The most effective way to teach your kids the value of money is to show them what things cost. Rather than say, ‘that toy is £10’, let them use the money from their money jar and hand it to the cashier themselves. They might even feel a sense of loss when they realise their pot is less full. Leading them to think about the things they spend their pocket money on and how far it actually goes.

You could even say ‘if you want to buy X, then you won’t have money for Y’. Making them feel more empowered in the decision making when handling money.

Create opportunities to earn money

As the saying goes, money doesn’t grow on trees!

While your kids can’t go out and get a job at this age, they can earn money around the house! Whether it’s cleaning their bedroom or helping you clean up after dinner. There’ll always be something for your kids to help out with.

Rewarding them for their work will show them that they won’t always be given money for nothing. It is something that is to be earned.

Instil the value of giving

Help them pick a charity or local fundraiser they care about and let them donate some of their pocket money.

The amount that they donate doesn’t matter here. What’s most important is that they start to understand the importance of giving and that giving can also make them feel good.

Don’t stop the conversation there either! Keep your child updated on the impact their donation has had. You could also encourage them to raise money for charity themselves. Whether it’s through a school bake sale or selling their old toys. They’ll get to see the other side of charity and may even gain some sales skills from the experience too!

Set them up with a bank account

Has your child mastered filling up the piggy bank? It might be time to take the next step and set them up with their very own bank account.

Try gohenry, suitable for children aged 6-18. You as a parent have an account, with linked accounts for all of your children. Each child gets their very own gohenry debit card with unique parental controls. And you can load money onto their card as-and-when, or set up a weekly/monthly direct debit for pocket money.

Think of it as a modern-day piggy bank that they can use on the go. Allowing them to feel even more in control of their hard-earned pennies!

Consider letting them enter the world of work

If your child is of legal working age, you could encourage them to seek a part-time job. A few weekend or evening shifts could help them earn some extra cash.

At this stage, you can then sit them down and teach them how to budget – it’s never too early! After all, some of their money could go into savings for university. Or for a new car to get them on the road. They’ll thank you for your advice later on.

You’ll want to be patient when teaching your children about money management. After all, even we as adults struggle to get everything perfect all the time. Mistakes are all part of the process. The best thing you can do is support them and try to model good money habits for them to follow.

If you’re struggling with money management yourself, remember you’re not in this alone. We want you to feel in control of ruling your finances and not the other way around! That’s why we offer you flexible repayment options for your home essentials.

Looking to spread the cost of your next household item? You can browse quality appliances and a large range of furniture on our site.

Make sure to follow us on Facebook and Instagram too. Where we share tips and tricks for making your money go further.

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This entry was posted in Finance, Budgeting Tips and How To's
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