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We all know how important money is. We need it to eat, live and afford the things that we love, but knowing the value of money is not something that comes naturally to everyone. So, when and how do we start teaching our children about money?
From spending sensibly to saving, there’s so much we can teach children to help prepare them for handling their finances later in life - and, according to our Mumsnet users, it’s never too early to get started.
When it comes to the best advice, we know that our Talk boards are the place to go for tips that actually work. We have over eight million users and know that anything they suggest will have been tried and tested with their own families. We also consulted kids' finance experts, NatWest Rooster Money, to provide some top tips for families.
Here are our top tips for teaching your children about money, as recommended by real parents.
1. Be open about your finances
It’s tempting to hide the issue of money from children, but by being open about your finances you can help them learn about the value of money. One of the best ways to start teaching children is to show them where it comes from. After all, money doesn’t grow on trees, does it? Talk to them openly about how you work to earn money and that pays for food, clothes, bills and their home.
By letting them hear you discussing what you can and can’t afford, they realise that you can’t always get what you want. As they get older, you could show them your bank balance or your payslip and explain the money that goes in and out, and how much you have left over for things you enjoy. This helps them to understand why it is important to spend your money wisely.
What Mumsnet users say
“Best thing you can do is talk, talk, talk about finances openly in the home. Discuss salaries (give approximate figures if you don't feel comfortable disclosing the actual amount), how much rent/mortgage is, how much bills are, how much the food shop is, etc. Teach them never to get into debt. Holidays, clothes, furniture - anything that's not essential should never be bought on credit. You save and when you know you have the money, then you buy it.” BHX3000
2. Teach them the value of money
If you’ve walked around a supermarket with a child, you’ll know they always want something! Pocket money can help with this - in fact, it is one of the most popular tips on our forums for teaching kids about finances.
Our users start giving their children pocket money as young as four and say it helps children appreciate that you can’t just have what you want, when you want. For example, give them £3 a week and if they can’t afford that toy, magazine or sweets they absolutely MUST have, they will have to wait until they have more money. It also helps them get familiar with money and how far it goes. £3 to a child is a lot, but when they see how much one magazine costs they’ll start to appreciate why mummy and daddy sometimes have to say no!
NatWest’s Rooster Card, a prepaid debit card, could help navigate your child through the world of finance. The card has an app to teach them how to spend and save their money. It even has a Virtual Pocket Money Tracker to help you keep on top of who's got what.
A Rooster Money subscription is free for NatWest Group customers. Usually £1.99/mo £19.99/yr. To be eligible for the offer you must be a NatWest Group customer and be 18+, have mobile or online banking and with child(ren) aged 6-17. Rooster Card is free for current NatWest Group customers for as long as they retain their account. Up to 3 free Rooster Cards per household. Other fees may apply. T&Cs apply. See website for details.
You can then easily check the app to see how much money each child has and remove money from their spend pot if they want to buy something. Children can even have their own logins, so they can see their money go up and down as they spend.
If you’re not sure about how much pocket money to give, Rooster Money have created a handy Pocket Money Index to give you an idea of the going rate.
What Mumsnet users say
“Definitely give some sort of pocket money. You'll soon discover that your kids will spend their money less easily than yours! If they ask for an ice cream, that must have toy, the bouncy ball they've just seen, a sausage roll... Whatever. Say "of course, get your money out and see if you have enough" ...9/10 they suddenly decide they don't want the impulse buy!” 00100001
3. Help them earn their money
We’re not talking about sending them out to work at the age of five, but children can start by doing chores around the home to earn money. This could be helping with the washing up, tidying away their toys, putting their clothes in the washing or helping to clean the car.
If they want to save up for something, they have the chance to earn more money by doing extra jobs, which helps them to understand how you earn money and prepare them for work later in life. With the NatWest Rooster Card you can top up their account for doing chores around the home, which allows them to see their earnings grow and get closer to affording that toy they really want.
What Mumsnet users say
“We have a Rooster Card (which has now been taken over by NatWest) which is linked to chores. Ds8 almost 9 gets £5 per week and has been able to save up for roller skates and LEGO sets that he has wanted and it works really well for us.” LunaLoveFood
With the Rooster Card from NatWest Rooster Money, you can gift children aged 6 to 17 with a prepaid debit card. It’s available in 15 different designs – including free options, as well as premium designs that let kids show off what they’re into, from football to animals. The Rooster Card links to the app that enables you, together, to allocate their pocket money, manage their saving and spending, and even link chores to earnings.
The Rooster Card helps kids form good money habits and build their financial confidence, in a safe and tangible way. Additional features for parents include a suite of card controls and notifications, and even the option of parent-paid interest. Meaning you can help be more hands-on with teaching your children about money.
A Rooster Card subscription is £1.99/month or £19.99/year. NatWest, Royal Bank or Ulster Bank customers can get up to three Rooster Card subscriptions free for as long as they’re with the bank. To be eligible, you must be 18+, have mobile or online banking. Card designs subject to availability. Other fees may apply. T&Cs apply. See website for details.
4. Show them how to save
When it comes to pocket money, do you let your child decide what to spend it on? Some great advice from our Mumsnet users involves getting children to save a portion of their pocket money every week. Then they have a pot of money set aside for when they really want something.
Whether it’s a new doll or the latest games console, this is a great opportunity to teach children about the importance of putting savings aside. But, it helps them learn about delayed gratification when further down the line they are able to buy something with their own money.
What Mumsnet users say
“My 6 and 8 year olds get £3 base a week, which is split 50:50 into saving and spends. They can earn an extra 20p a day for helping me with a job each. I use Rooster.” Mumofsend
“I bought my DS a piggy bank as soon as he could count. He got £2 a week pocket money, £1 to spend, £1 to save. Now he gets £6 a week pocket money, spends £3 and saves £3. He earns extra washing our car. I told him to think of something he really really wanted and knew I couldn't really afford, and when he had enough, he could buy it. In Feb this year, he took all his money and bought himself a Nintendo Switch and a game. But he took ages, checking sites and prices. Worked out how to minimise the cost. He's very proud of it. Now he has a basic savings account - he's 13 - and checks his balance online. No idea what his next big purchase will be. He chose not to have a card yet.” MintJulia
5. Show them how to budget
Budgeting is a big part of life for many of us, especially now during the ongoing cost of living crisis. Our Mumsnetters recommend getting the kids involved in your monthly budget to show them how you spread your money across the month and afford things you need and want.
This could involve getting them to help with the weekly shopping budget, making a list together and getting them to find the best priced items in store. This teaches children about how to pay for the things you need, like food and cleaning items, and how much is left over for treats, like chocolate. If you can’t afford it, you can’t have it!
Simply saving for something they really want helps to teach them about budgeting, too. Talk to them about how long it will take them to save their pocket money for that item, you could even make a chart to show them how their savings are going up. Then, if they take any money from their savings pot they will start to understand that it takes longer to afford that bigger item.
What Mumsnet users say
“Give them a budget to buy presents for people at Christmas, birthdays etc. Talk to them in the supermarket about working out the best deals etc, brands vs generic, costing out meals. Be honest about affording things... so money needs to be used for electric, water, food clothes etc so we have to chose between zoo or theme park. Encourage them to look after their belongings. And finally... teach them about interest and not spending money on things you can get for free (such as physical pocket vs paid for bank cards...).” Aroundtheworldin80moves
“I’ve always given them a budget for Christmas and birthdays. My ds works out his Christmas list to the last penny. If he cannot afford something, something else gets bumped.” LorenzoVonMatterhorn
NatWest Group are one of the largest banking and financial services groups in the UK, guided by a purpose to champion potential and help their customers and families to thrive. Rooster Money is a great example of how they're arming families with the tools to discuss and educate children on finance and making positive steps with their money - all whilst offering full parental control.
About the author
Gemma Wilcock is a freelance writer and copywriter. At Mumsnet, she creates content providing useful parenting advice, information and top products to make life easier – as a mother of two children herself, Gemma knows how important it is to get the right advice.
She loves writing about subjects that will be helpful to the reader – and herself! - including recommending top products and helpful advice on Mumsnet that assist parents in their day-to-day life. With two children, Gemma knows the importance of looking for products and services that will make life with a young family easier. So articles like this are just as useful to her as they are to you!