How do you teach kids better financial habits?(12 Posts)
Hi everyone! Would love to hear if anyone has ever had any conversations with their children about money and if so, what kinds of things were you trying to teach them? Is there anything that you find difficult or annoying about it?
Early talk when DD was 5 years old (she is now 12) and wanted the Disney Princess Heinz spaghetti hoops. They were 55p. The Heinz without Disney were 50p. Store's own brand was 25p. The ingredients were identical. I gave her 50p and said she could have the Disney Princess hoops but she had to do some extra chores to earn the extra 5p to pay for them. Or we could buy the Heinz without Disney and no chores or she could keep 25p and buy something with the difference. We went home with the store's own brand spaghetti hoops and a notebook. She's been bizarrely brilliant with money ever since. It was more a case of right place right time and I thank those Disney princess tims for their lesson to this day. We did the same with garden produce - work and you get a reward - make lavender bags from the work you do to maintain the plants and cut them back and separate the good bits from the chaff etc. Even now she will take the bus as that is included in her pass rather than the train, look to recycle things to sell them on etc.
We have pocket money from earlier on. DS2 is having 2 pounds per month, we only buy presents for him on birthday and Christmas. So when he want something, he need to check if he has enough money in his account( we keep a notebook with the movement). I think this really teachs him he has to plan his spending.
DS1 is teenager, he has his own bank account and with card. I do talk with him about the finance security, like the fruad, identity thief, money investment( house, share etc)tec. No plan, just small talks whenever the topics are mentioned. I think these are really important preparation for a teenager.
Nice! I'm thinking of using a pre-paid card like Osper, any thoughts? I think the card is connected to some app, where you can control your kids' spending, set allowances etc.
DS1 has a card with HSBC, he has a saving account with it as well, called my savings. As DS1 doesn't really spend much of his pockets money, so I taught him to moving the unused money into his saving account, which has a nice saving rate, around 3% I think. And I pay regularly into his current account with his pocket money by online transfer. We have agreed he need to let me know if he want to use the money from saving account. I check the statement regularly.
For DS2, although he is looking forward to open an account himself, but he doesn't really has much money left to be put into the bank.
It's an ongoing conversation, from when they are quite little. I think one of the first things was giving them some money at the Church fete, and explaining that they had a finite amount, and that they needed to look round everything first so they could choose what
tat they'd like to spend it on and then, when it was gone, it was gone.
Then - I remember ds in particular was such a book lover, and I introduced him to the charity shop where he could get books for 20p rather than £3.95 or whatever. He was in heaven.
then things like explaining why you'd be nuts to buy sweets or drinks at the theatre or cinema or out on day trips.
You sort of do it all while you go along
Op, personally I think the Osper/GoHenry cards do not teach how to manage finances.
They make money invisible. That leads to poor money management and possible debt. It's easy to pay by card for something on impulse whereas cash is completely different.
I taught mine the value of money, how to save etc with cash. They are all adult now, would never dream of buying anything they didn't have the money for already.
I also taught them the reality of those pay day loan adverts by getting them to work out the amount they would have to repay taking into account the shocking interest rates.
Well my DC have always, since they were old enough 6 or 7, had to do appropriate pocket money jobs to get there pocket money. However, in reality I still bought a lot of stuff for them too, clothes etc obviously. Now they're young teens, and I can no longer be trusted to buy acceptable clothing apparently(!), they have to buy their own, their own cosmetics and 'fancy' toiletries, provide their own going out money etc. I still buy the basics like sanitary products, deodorant, toothpaste, etc. So now I've opened a NatWest ac for them, online, no overdraft, debit card, and pay them a monthly allowance on pay day. They still have to do chores in return for the allowance but now they are totally in control of their own spending and they are learning about budgeting. So DD1 has saved, only bought some books and vinyl, and has a couple of hundred GBP in her ac. DD2 spends it as soon as she gets it on make up clothes etc and this week didn't have any left for going out to town when her friend asked her. She asked for an advance. I said no. She's learning!
Osper works for us. It automatically puts DS's pocket money on each week, so we don't have that whole annoying faff of forgetting to give it to him (or him accusing me of having forgotten!). They can't go overdrawn and it's v. easy to monitor. It's the same as money, so if he doesn't have enough on the card he can't spend it!
You sort of do it all while you go along
That's what we've done, we've included our son in all kinds of "money" conversations since he was very young indeed.
We've always encouraged him to save his birthday and xmas monies and show him how it builds up to buy something really good rather than just wasted on cheap toys or sweets etc. As he got older, we sold his old toys, outdated consoles, etc via ebay and gave him the money to put in his bank account to use to buy something special, such as his own ipad. At first he was reluctant to sell presents etc but now he's keen on "recycling" as he's seen the benefit of having new stuff he wants rather than a room full of old stuff that he's never going to use again.
Now he's a teenager, we have more "adult" conversations about mortgages, credit card debt, loans, budgeting, etc. He's now very astute about money. The other day, he came home from school where they'd obviously been talking about spending cuts etc., and one of the topics was text books and he was saying how can it be cheaper to make and photocopy worksheets etc., given the staff time, copier costs, paper costs, toner costs (we've made him aware how much printer ink/toner costs so he doesn't waste it at home), etc., compared with just a few pounds for a book. Whether he's right or not is a different thread, but it shows he's thinking about money, comparing options, etc.
A colleague of mine used to give his kids a budget every month to pay for EVERYTHING (bus, lunch, school uniform, shoes etc). He said the first 6 months is chaos and they had to cycle to work but after that they were ok. He said he never had any issues with them needing money / credit card bill paying off at uni. Sounds a good plan to me!
Budget idea is good, but it encourages them to spend when they don't need to. It becomes a target, rather than a limit and doesn't encourage saving towards future periods or bigger purchases. It would be even better if you could give some kind of incentive alongside to encourage them not to spend it all - i.e. match pound for pound anything they have left over.
(Hence why it's endemic in the public sector and other large organisations to go on a spending spree every March as they're frightened of the budget being cut if they don't spend it all!)
Join the discussion
Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.Register now
Already registered with Mumsnet? Log in to leave your comment or alternatively, sign in with Facebook or Google.
Please login first.