Talking to children about money

Chocolate coinsPlenty of parents don't talk to their children about money. They think it's a dirty subject, off-limits, unnecessary. But money matters, whether you're three or 33, nine or 99.

And even if you don't talk about money, you're still giving your kids messages about it just the same, all the time, in your behaviour. So if money worries you, your kids will pick up on that; if you spend frivolously or save assiduously, they'll notice all that too.

Spending and saving

We all need to spend, and we all need to save. Parents need to teach their kids how to do both.

Spending is the easy bit, the tough bit is understanding that things come at a price, and the money to buy them has to come from somewhere (lots of us adults are still grappling with that one). It's worth explaining to kids, from as soon as they're old enough to understand, that money isn't magic stuff that just 'lands' in bank accounts, and that credit cards aren't a way of getting what you want, when you want it, with no repercussions (which is what a lot of kids seem to think).

Saving is as important as spending: the best way for children to internalise this is to get them to save themselves, for something they want.

If they're given money for birthdays and for Christmas, or if you give them pocket money (see below), it's a good idea to encourage them to save some of what they get.

Explain, too, how interest works - ie the money you keep in the bank is actually lent to the bank, and in return the bank pays you to borrow it. Every bank has children's, and it's a good idea to open bank accounts for them from the age of seven or eight, so they get used to the idea of banks as a place to save - and as a place to get your money from when you've saved up and want to spend.

Pocket money

Threads abound on Mumsnet Talk about what's an appropriate age to start giving pocket money, how much to give, and what the money children are given has to cover.

All these things matter, and the answers are different in different families. What's true in every family, though, is that pocket money is an important tool for teaching lessons about money, and also that it's important that you make clear to your children what their pocket money covers.

You need to be realistic, and to stick to what you've agreed: so if your child spends all his or her money for the week, don't just dole out more - the lesson they'll learn is that money grows on trees, and it doesn't.

Chat to other parents on our Talk forums

This Mumsnetter says: "We give a small amount each week, given on same day each week. Our son gets to choose what sweets he buys with it - and when it's gone, it's gone and no more sweets that week. Kids soon learn what combination of sweets 'fit' their pocket money. And they have to make choices about whether to buy one large item or a few small things; and whether to eat it all on one day, or to save something for another day."

Another question a lot of Mumsnetters ask about is whether pocket money should be linked to behaviour or chores and, again, there's no 'right' policy - different things work in different families.

"We don't link it to chores, but I do give them a bit extra if they help with specific things - sorting out the recycling, or nipping to the corner shop (they do other chores without being paid eg tidying their rooms, laying the breakfast table). It has started to work very well in terms of them saving for things." Jamieandhismagictorch

Mumsnet is one of the organisations backing calls for children to be taught about consumer finance (savings, debt, mortgages etc) in schools. But until this has been achieved, there are resources on MoneySavingExpert to help you educate your children about the importance of understanding money.

Disclaimer: Any content in our family money section is intended as general information only. For specific advice about your personal financial situation, get advice from qualified, independent, regulated professionals.

Last updated: about 3 years ago