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October 01st, 2014

Are your children safe with money? 4 Top tips to canny consumers and savvy savers.

 

I was recently asked by Sky TV to comment on the recent announcement that the Department of Education was introducing

finance management into the curriculum for secondary school children. About time too and this is certainly a step in the right direction, as all parents have a moral duty to ensure we make our children safe with money. Managing money is a life skill and needs to be taught both at home and at school. We give our kids swimming lessons in order to keep them safe in water -we don't throw them in the deep end and expect them to swim.

In order to make our children safe with money we need to be giving them some pocket money or an allowance and allow them to earn extra for additional jobs or duties.

My own daughter is at boarding school and the other day reported back that for the last few months she was really proud of herself for managing her monthly allowance so well. Indeed she was 8p under spent last month and I had to smile to myself with the thought that my 15 year old has taken on my values of budgeting and looking after the pennies!

I get many parents saying they are sick and  tired of kids asking for things; why don’t they value what they have? Why are they always asking for more? We call this pester power and it is symptomatic of our current world where instant material gratification is the norm. Are our children spoilt or is this a popular myth? So many parents today become confused with how to cope with the bombardment of advertising messages and children’s demands for more. It’s hard to be clear and firm and consistent with kids and to not succumb to pester power. It can be so difficult to say NO when faced with your children telling you "you're the best mum in the world. I love you so much - thanks for buying me that game."

Parents have the biggest influence on children’s financial behaviour so in order to raise a generation of sound financial citizens here are our 4 top tips to ensuring canny consumers, savvy savers, generous givers and insightful investors! 

  1. Start giving your children small amounts of pocket money whilst at primary school and for teenage children give them an allowance. It sends a very powerful message that we trust you and feel you can be responsible with managing money. How much you give and what they can spend their money on will be personal to each family and age dependent. You might like to compare notes with other parents. So  primary school age kids may be interested in treats, toys or comics whilst teenagers usually are motivated by  mobile phone allowance and items of clothing.
  1. Set up 3 jars: saving, spending and sharing – you may decide what proportion goes into each one or leave that up to your child. Having your children wait and save teaches delayed gratification. If you want to teach compound interest you can even reward with them earning interest on the savings if they are not spent in the month. 
  1. Do talk to your children about the powerful consumer messages the media world employ to entice you to buy goods. Discuss with older children the role of advertising and the manipulation involved. Most kids like the idea of not being conned by the conglomerates! 
  1. If it’s important to you that your child learns to be focused on/considerate of others, including spending some money on others then model this (let them know what you do by way of charity) as well as requiring it of them. Let them donate toys to a local hospital, or giving to old folks’ homes in the form of a baked cake etc. Many schools have some kind of charity effort before Christmas –if the children are asked to put together a donation box then consider getting them to fund it themselves or work to earn the money you spend on it or at least to go and make the purchases themselves.

Does your child get pocket money or an allowance? At what age did they understand the value of money?

If you have tweens or teens this may be  becoming a hot topic of conversation, so  do check out our latest teen workshop where we explore values and boundaries and learn how to connect with teens, even when they want more and we say no!

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'The Teenage Years - setting then up for success.' is running on 8th October 2014, 7:30-10pm in Clapham. Click here for details and don't worry if you have missed it contact us so we can let you know when it is running again.

Happy parenting

Elaine and Melissa

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