Kids & Money

How to Teach Your Children the Value of Money

Teaching Kids About Giving

No Comments »Written on May 14th, 2012 by
Categories: Giving, Money Awareness, Money Lessons

Most of the posts I write here are about teaching children about sensible spending and saving. But, there is another element of money management that they need to be aware of: giving. I know that times are tough for many of us right now, but, in an ideal world, we should all be giving something back to other people. I know some families who take a fairly formal tack here by splitting their cash three ways (spend, save and donate); others look to handle the ‘give’ in different ways.

Truth is, the kid has been thinking about this himself recently. He was learning about the Five Pillars of Islam and got fairly curious about the third (Zakat). This puts a responsibility on the individual to donate 2.5% of their wealth to people who need it. He thinks this is a fairly cool system. I’m not sure he is at the stage where he’ll give up a specific percentage of his pocket money but it got us talking about other ways to give. Actually turned out that he wasn’t doing too badly on that front because of the way we work as a family generally.

He’s already learned that it feels good to give. I’ve spotted him a few times popping some (of his own!) money into charity collection boxes. But, now he’s older, he sees that this is just a small thing though I could remind him that other things he does also qualify as giving. For example:

  • We save up his outgrown clothes and shoes and donate them when we get charity bags through the door.
  • He has a room clear out every now and then – he sells a lot of stuff on eBay but he also donates a lot to our local charity shops (admittedly, this is often stuff he thinks won’t sell or is too bulky to post but his heart’s in the right place!)
  • We try to recycle bigger items like furniture and old electrical items with a value (stuff like mobiles and computers) to charities or we give them away on sites like Freegle.
  • We buy books from our local Oxfam bookshop and donate our own books back whenever we can.
  • He takes part in charity events in and out of school (i.e. Red Nose Day and fun runs etc).

The whole spending. saving, giving thing is all inter-connected. He knows, for example, that if he buys a book in Oxfam, he is making a donation and, if he then takes it back when he has read it, he is effectively making another as the charity can sell it again. So, he may not be tithing off a third of his pocket money to make formal donations but he is doing his bit. Job done :)

Should You Make Your Child Pay Their Mobile Bill?

No Comments »Written on April 25th, 2012 by
Categories: Budgeting, Money Lessons, Money Management, Pocket Money/Allowances

Most kids will get mobile phones at what seems like a relatively young age nowadays. For parents, this can be a bit of a comfort blanket – you can keep in touch with your child (and they can contact you) when they aren’t at home. This gets more important as they get older and more independent. But, a phone costs and you’ll need to think about who foots the bill. Should you pay or should you make your child take responsibility for funding their calls, text and general usage?

This can be a tough call. On the one hand, even if you aren’t 100% happy with them having a phone to start with, you do get some peace of mind by letting them use one. You can keep tabs on them and they’ll be able to reach you when they are out and about if they have problems. So, some parents will take on payment on the basis they would rather their child had a phone than they didn’t. If you pay their top-ups or their monthly allowance, then you do stand a better chance that the phone will actually have some credit when they really need to use it.

But, there is a counter argument that it is a good thing to make them pay themselves. This is likely to be the first bill that they are given to manage and it can teach them useful lessons about money management, budgeting and financial commitment. Some parents I know buy a PAYG handset and then simply leave everything else up to their kids. If they want to use the phone, they need to top it up. If they don’t, it’s not much use to them. This can be a good starter model. As kids get older and use their phones more it may be more cost effective to take out a contract. They may be earning from a part-time job or you may give them a more formal allowance at this point and they may be better able to cope with a set monthly commitment then.

I have to admit that I just decided to pay for my son to have a monthly contract. He started on PAYG but the costs were high and we weren’t getting much out of the money it cost us. We considered putting a small amount on the phone each month and then letting him top up if he wanted more (this works for some of his friends) but that didn’t work so well for us. He ran out of credit a couple of times when he needed to call us.

The problem I have is that he is too young to get enough pocket money to pay himself (or to get a job!). So, we gave him a low budget and told him to find the best deal. That in itself was a useful lesson in comparing costs for him. He also knows that he pays any cost he runs up by going outside his allowance himself and it’s been interesting to watch him checking how he’s doing and budgeting if he gets close to the wire. So, I guess muggins here pays but at least I get peace of mind that he is contactable and he’s learned some useful life skills along the way. Now, I just have to try and get the message across that he shouldn’t turn the phone off just when I need to call him!

BBC KS1 Bitesize Money Games – Igloo Shopping

No Comments »Written on April 19th, 2012 by
Categories: Games/Online learning, Money Lessons

The BBC Bitesize sites have various online games to help kids consolidate their learning at both KS1 and KS2 levels in maths, literacy and science. One of the elements of the KS1 curriculum is money awareness and the site has a fun and simple game that could help your child called Igloo Shopping.

The aim here is to help Molly as she visits the igloo shop, run by Pablo. Molly wants to buy various items and you have to make sure that she gives him the correct change. So, Pablo pops out with an item and you have to pick out the right coins to make up the money before she can buy it.

There are three levels of play here – medium, hard and really hard. Each new level introduces more coins (and then notes) and comes with trickier totals. Although this is a simple and easy to understand game, you can also extend it past its basic level by talking to your child about how money fits together to make a total.

So, for example, they might click on two 10p pieces to make 20p to start with. You can then also encourage them to put that amount together out of other coins. You can use the lessons learned here when you are out shopping as well. Try popping into a shop to buy something small and encourage your child to find the right money from a handful of coins.

This game is a great way to introduce the basics of money and how coins and notes are used to pay for stuff. Other games on the Bitesize site can also help with basic number, addition, subtraction and division skills, so they may also be worth a go. The games here are pitched at a young age group and are fun and easy to use. Most kids won’t even notice they are learning!

You can play Igloo Shopping free on the BBC Bitesize website.

 

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Earning Money: Get Your Kids to Sell Stuff

No Comments »Written on April 11th, 2012 by
Categories: Earning Money, Money Management

There are three main constants in my son’s life. He has too much stuff, he wants to get rid of some of it and buy new stuff and he doesn’t have enough cash to buy what he wants. Now he’s older we are focused on him saving money to get what he wants but we’ve also added a new string to his bow: earning money.

He isn’t old enough to get a part-time job yet and he isn’t desperate enough to supplement his pocket money by doing jobs around the house if he can help it. So, we have started encouraging him to sell some old stuff to raise funds. This suits us just fine. We de-clutter the house and minimise the pester power when he wants something. He just likes the money :)

We sell most of his stuff on eBay, although I know some families that use car boot sales to do the same thing. We don’t just hand over the cash – there are more lessons to be learned by not doing this, so we have some ground rules. He needs to learn that things need to be paid for and what he is paying for here is my time.

So, I list his auctions (he researches them and sets prices etc) and I deal with the postage and packing. When an item is sold, he deducts the fees and costs and then we split the profits. I guess I could give him everything we raise, but I think it’s a better money management lesson for him to pay his own way. So, he pays for my time and gives a nod to the fact that we often paid for the stuff he is selling in the first place.

Friends who use car boot sales do much the same thing. They make their kids pay a proportion of the entry fee before they get the profits. You don’t have to do this, of course, but it is a simple way to make kids learn that you sometimes have to spend money to make money.

He discovered another option on his own – selling his old video games and DVDs to high street stores (he favours CEX). He also worked out that he’ll get a higher financial value if he takes a credit note rather than hard cash. His last haul has been keeping him in new games and films for three months now. Once he is done with those, he’ll resell them again and carry on.

I think it’s also important to think about giving as well as earning money so we do encourage him to give some stuff to charity shops or we put it on Freegle every time he has a clear out. This is a good way to reinforce the spend, save and give message.

Win a Set of Demon Dice – Share Your Tips on Teaching Kids About Money

No Comments »Written on April 10th, 2012 by
Categories: Games/Online learning, Money Awareness, Money Lessons

We’ve got a brand new set of ZooBooKoo Demon Dice (also known as Dude Dice) to give away to one lucky winner. This game is aimed at kids between 9-11 years and helps them practice KS2 mental maths. This is a fun game that consolidates their understanding of addition, subtraction and various times tables (6, 7, 8, 9, 11 and 12). As you probably know, kids learn best when they are having fun (and don’t think you are trying to educate them!).

Basic numeracy is one of the cornerstones of understanding money and how it works. As parents we all have different ways of helping our kids get the financial skills and awareness they need for later life. All you need to do to win the game is to leave a comment on this post sharing one of your best ideas/tips/ways of helping your children learn about the value of money.

Please note that this competition is only open to people in the UK and the winner will be picked out of a hat on Monday 16th April. You and your tip will also get a mention in a winning blog post (with a link to your own site if you have one).

So, what are you waiting for? Let’s hear how you managed to get your kids to understand how money works and what it’s worth!

Money Lessons: Teaching Kids About Banks and Cashpoints

No Comments »Written on April 4th, 2012 by
Categories: Money Awareness, Money Lessons, Money Management

Kids take in more than we realise sometimes; they also put their own spin on what happens in the world around them. Once your child gets less self-focused and more interested in the world and how it works it might be useful to talk to them about where the money comes from that you spend.

Cashpoints/ATMs are a perfect example of how a child can have an alternative view of reality. I remember a few years ago being nagged by my son to buy him a new expensive toy. Having been through all kinds of ways to say no, I latched on to ‘I don’t have enough money’. He then told me we could go to the bank and use the cash machine to get some. When I told him I didn’t have enough money in the bank, he got really confused. Turns out he had just assumed that ATMs were places to get money whenever you needed some.

He basically didn’t understand that you are spending your own money when you shop and don’t have access to an unlimited amount of cash. This led to a basic lesson in the banking system. I explained that we earn a certain amount every month that is paid into the bank. We use some of it to pay bills and the rest to spend on everyday stuff or to save.

He was too young at that point to go into the intracies of overdrafts, credit cards and borrowing but this was a useful first lesson. He started to understand that you don’t automatically have money and that you have to earn it. We also used this point to explain a little about how money is not just for fun stuff and to explain the difference between need and want. You should keep this kind of lesson simple according to the age of your child but it is a useful starting point for teaching them about money, budgeting and cash management.

 

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Money Lessons for Kids: Look After the Pennies….

No Comments »Written on March 27th, 2012 by
Categories: Money Awareness, Money Lessons, Money Management, Savings

I’m known as the ‘Change Lady’ at home as I always have pockets full of small change. If I leave the house with £1.99 and buy something for 99p, I’ll invariably use the pound coin rather than count out the exact money. This is great for my other half, who periodically mops up all my shrapnel and spends it. He knows that a pile of copper has some value. But, it doesn’t send such a great message to my kid.

I look a little like I don’t value small denomination coins and I don’t want him to think like this. After all, all money has a value. I’ve been thinking about ways I can kick my bad habits here and have talked to some other parents who have tied looking after the pennies into broader money awareness and saving messages.

The solution I like best right now is the copper saving jar. One parent I know empties all of her small change into a jar every now and then; her kids also regularly dig round the sides of the sofa and put in any coins they find in the street when they are out and about.

Once the jar is full, the family takes it down to the supermarket where they stick it in the coin change machine. This counts the money and spits out a voucher that they can spend in store or redeem for cash. I guess you could also use your local bank though they might not appreciate counting the coppers as much!

The joy of this is that you can start with a small jar for younger kids who need more instant gratification. You can then build up to bigger jars as they get older and have the patience to wait for results. I guess you can also work in all kind of money lessons and counting games here as well.

You could, for example, get your kids to guess how much money is in the jar before you cash it in. You can get them to actually sort and count it. If you talk to them about different coins and how they all fit together, you can consolidate their understanding of the coin system and what goes into what. And, most importantly, you are teaching them an easy lesson on saving!

Counting Games for Kids: The Game of Ladybirds

No Comments »Written on March 21st, 2012 by
Categories: Games/Online learning, Money Awareness, Money Lessons

Orchard Games make some great educational (but fun!) games for younger kids. These are useful to have at home, especially as so many schools in the UK use them so you can reinforce the lessons they learn there. The game of Ladybirds is a simple but engaging counting game for kids aged 3-7 years. This is a handy game to help them learn about counting and number recognition – these are the first steps to getting them money aware.

Players (2-4) throw a dice and pick a card that has the same number of spots on it as the number they have thrown. Once all the cards have been picked up, each player turns over his/her cards and counts the ladybirds on the leaf on the other side (these won’t necessarily match the number of dots on the front). If you have the most ladybirds, you win. The cards themselves can also be easily turned into a game of Snap or can be used as an aide for learning about counting and recognition in general.

How to Teach Kids About Interest

1 Comment »Written on March 13th, 2012 by
Categories: Budgeting, Debt, Financial Products/Accounts, Money Awareness, Money Lessons, Money Management, Savings

There are two types of interest that we deal with most often in life: savings interest and borrowing interest. Kids could really do with learning about both of them and, although this can seem like a weird concept to them, it’s good to get them in the loop as soon as you can. This could ultimately affect their attitude to saving and to debt. So, how should you handle this.

You can start with a general overview to get them started. The easiest way to do this is to get them thinking about their money (i.e. their pocket money or allowance) and your money. They’ll understand early on that they own their own cash and that you own yours. It’s what you do with your cash, or to get more of it, that involves interest payments.

The pile of cash they have is the base around which you’ll build your interest explanation. So, it’s also useful to give them a basic overview of borrowing because, at the end of the day, you need them to understand that you earn interest because the bank that runs your savings account ‘borrows’ your money and you pay it when you yourself borrow.

The easiest way to teach them about savings interest is to get them to use a formal account. You need to explain that they are basically lending the bank their savings so it has to pay them interest in return. It may be better, with younger kids especially, to use an account that adds interest on a monthly basis if you can. Having to wait a year to see how much your cash has earned can be beyond the attention span of most kids. If this isn’t possible, then try using a savings calculator to show them how much they would earn if they saved a certain sum. Give them something concrete to think about.

The easiest way to teach them about borrowing interest is to charge them! If they want an advance on their pocket money/allowance then charge them interest. This doesn’t have to be a lot and you can charge a flat amount or a percentage sum. But, this will very quickly teach them that it costs to borrow money. This is a lesson that you really want them to learn before they leave home.

What do Your Money Habits Teach Your Kids?

2 commentsWritten on February 23rd, 2012 by
Categories: Budgeting, Debt, Money Awareness, Money Lessons, Money Management

Kids learn more from you than you might realise and the way you manage your own cash can colour the way they manage money in the future. They can learn about good habits at school; you can tell them the stuff they ought to be doing. But, if you don’t follow these rules yourself, they may simply learn from your example. Parents are the people in their lives whose behaviour gives the regular messages they are likely to use later in life.

So, for example, let’s say you don’t run a family budget. You technically have enough money coming in but you are in the habit of over-spending at the beginning of the month. By the time you get to the end of the month, you have to cut back drastically, everyone in the house has beans on toast for dinner for the last few days before payday and you search down the back of the sofa for change when you need to buy something urgently. The message you’re giving here is that you don’t need to budget as money will manage itself.

Or, let’s say that money is tight and you rely on your credit cards to get you through from pay check to pay check. You don’t make more than the minimum payment and you often struggle to buy stuff because you’re close to your limit by the end of the month. The message you give your children? Credit cards are a core part of regular spending and it is OK to borrow from them.

Even if you manage your money sensibly, you should think about the messages you give out. If, for example, you use a credit card for a lot of regular spending but pay it off every month, then you should have a chat with older kids about how this works. Explain that you are using the card for convenience and, if you couldn’t afford to pay it off, you would not use it so much. Tell them that not using cards right can lead to problems and that you should always try to live within your income. Otherwise, they might get the message that it’s OK to buy anything you want this way even if you don’t have the cash.

Children learn a lot by example. If you get into good money management habits and talk to them about why you do stuff and what you are doing, they are more likely to adopt these habits themselves over time.

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