How do you teach your children to budget and save money? - £200 voucher to be won

[CeriMumsnet]

As parents, we all want to equip our children with skills and knowledge to succeed in life. Budgeting and money management is a big part of this, but it can be hard to know when and where to start. That’s why we’d love to hear your tips and stories about teaching your children money skills.

● Post your tips and experiences in the thread below to be entered into a Mumsnet prize draw
● One lucky MNer will win a £200 voucher for a store of their choice (from this list of VEX retailers).
● The closing date for entries will be 15 February 2024.

Here’s what some of our users say about the Natwest Rooster Card:

‘Very easy to transfer money, I get a notification when they’ve spent money, they can withdraw cash, use contactless etc. You have loads of control too e.g. whether they can use it for online purchases etc.’
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‘We have a Natwest Rooster Card which is linked to chores. Ds8 almost 9 gets £5 per week and has been able to save up for roller skates…that he has wanted and it works really well for us.’
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I was always encouraged to save as a child and have instilled this in my Children. They have money they have saved in their own banks they can use to buy things they would like and money in a savings account we put away when they build up alot in their banks. I help them out if their is something they want to buy and offer to pay part of it. We talk about money and it's worth very openly and talk about the reason why my Husband and I go to work to earn money to pay for our lives.

DD has always saved. I show her the transactions and balance on the app, and she always got very excited to see the growth.

As far as budgeting goes, she helps me to do the online shop. We set a weekly budget and then add things to the basket or remove if we've gone over budget.

She's 15 now and has her own bank card. I transfer pocket money into her account and she can spend it as she wishes. She never spends frivolously, but saves for big purchases.

I've always tried to explain the value of things since the children were young and also try to encourage them to think for themselves and see how the prices of things like chocolate (easter eggs, christmas chocolates etc) are high before the event but how you can get a bargain after the event to help them make their own decisions when they are spending their own money. We've also had basic discussions about the general economy since they were young e.g. who pays for university, what happens if someone can't work due to injury or illness, looking after the elderly in society etc. to help them understand a little of the bigger picture and how things are related and paying taxes etc. Sounds heavy but it wasn't - just with little sketches and talking about things little by little at various times.

I go though what I get in a wage and what I pay out, make it simple and tell them that the rest has to be put in 4 piles in my bank account to use each week for shopping, eating out and birthdays and anything left is put in mummy's piggy bank for a holiday.

I encouraged my DS to get a job, no mean feat these days due to a radical change in child labour law since I was young. I was waitressing at 13. He managed to get a paper round at 13. He then opened an account and I told him to always save something. We have always discussed current affairs and economics and he has seen by example how we are careful with money. If it was a special offer we talked about it, plus stuff like going out for an early birthday menu. I also warned him about relationships and to not end up with someone who was workshy.

I have set up a simple spreadsheet for each of my children to teach them the following:

• the habit of putting money aside for charitable giving, saving for birthdays and holidays etc

• spreadsheet skills

• the basics of double-entry bookkeeping

teach them the value of money by simplifying what you earn and pay out, give them spending money when you feel it's the right time and they won't just waste it on sweets, set a savings goal for something they want (the latest computer game) and they can save for this - either in a glass jar - so they can see the savings grow, if they are able to understand tech and websites- an online savings account.

Talk to them about money, give them some money for spending and tell them I am saving a similar amount each month for them.

There are lots of games you can use to teach your kids about budgeting. A fun one is to use beads or counters. Say the beads represent income, then label jars or bowls as different expenses or outgoings. Keep it simple for younger kids ‘rent’, ‘food’, ‘savings’ and ‘fun’.

Make them put the right amount into jars for needs, then savings. Then let them add the remainder into the fun money jar. For older children, use it as an opportunity to teach them the 50-30-20 rule. (50% needs, 30% wants and 20% savings.)

Mine have had bank accounts since 11, and got jobs at 14. They both use an app called ‘You Need A Budget’ which comes with access for family too, which really helps them see their goals and save up for them.

One week I put my child in charge of the weekly grocery shopping budget. Help them make a list of food they need and price-check it in the supermarket. Get them to add it all up and see if the total is within budget. They really appreciated the cost of food and how I had to manage my money.

I think giving pocket money is a great way to teach children about budgeting. Each week they’ll have a set amount of money to work with. They decide where it goes and how best to make it last.
For older children - swap to a monthly allowance, like a salary will help them learn to stretch their budget for longer periods.

If you decide to give your child a job (I give mine painting door frames and skirting board - using masking tape first) they’ll be able to boost their earnings. It’ll help them grasp the relationship between work and earning money too.

The concept of earning money is demonstrated really well by linking chores with pocket money - we price up different chores (tidying room - 50p, taking he bins out 20p, etc) & tot up the wages owed at the end of the week. It feels like it does get the message across as there are weeks where my son can doesn't do very much & then feels the disappointment of having a very light 'pay packet'!
I was really keen to get my son his own bank account - but found he can't have his own with a card until he is 11! He did have a Go Henry account for a while, which I think is a great idea - but it was costly at £3.99 per month, so the Rooster card does seem a good lower cost option.

Give your children envelopes named spend and save. Every time they get their spending money get them to divide it between the envelopes.

Let’s say their allowance is five pounds per week. On the day they get paid, they put two pounds in the Spend envelope, two in Save, and the rest in the one marked Give. It’s basic, but it works even for six-year-olds.

All 3 of mine have had child trust fund accounts which we pay into and I update them on the amounts when we get the statement. They've all had cards for pocket money which they can see on the app and when they say they want something we ask how much can they afford and make them wait until they've saved enough for all or an agreed fraction of the cost.

Eldest was gifted some money from grandparents after GCSEs and she knows 75% is earmarked for driving costs when she wants to learn. The rest she uses sparingly on lunch and bus money. She doesn't currently have a job for personal reasons. (She's 17 so at college.)

They all know that bus money has to come from pocket money (obv we give them enough for this). Middle child often chooses the 40 min walk home instead so she can save the money.

Oldest 2 now have proper bank accounts and use the bank app on their phone. They never spend anything without checking their balance first.

DH and I are not great with money so I'm happy when they decide not to buy things because they prefer having money in the bank!!

I have always taught him to think about what he might want in the future, not just what he wants right now and whenever he gets money to make the right decision about how much of it to save. As he has got older and understood about interest he is keen to get 'free' money instead of spending it all.

I use an excel worksheet or template, they rolled their eyes at this one. But, having a way to organise their figures into ready-made columns seriously helped. It doesn’t have to be a complicated online spreadsheet with formulae (although tech-savvy teens who are good at maths may enjoy this). A simple template you can download and help your child fill in is all you need.

The first step is to get your child to work out how much money they have coming in, like a week or month. Explain this is called ‘income’ and, depending on their age, might include

• Pocket money
• Money earned for jobs around the house
• Money from the Tooth Fairy
• birthday/festival money

Help them add this up and write down the total figure.

Ask them what they want to save and spend

Mine are still quite young, but the eldest gets pocket money and has been taught that if he wants something that costs more than his money, he’ll need to wait and save for it.

I always talk to my children about money so that they understand I earn it by working and how me and my husband budget for the month. They get pocket money that they earn and we discuss with them how they are going to spend it. They've started to understand once it's gone it's gone and are wasting it much less now.

I’ve always tried to encourage my child to be sensible with money. For example, when my child has received money for birthdays or Christmas, they spend a little and save the rest.

I would help children work out their other expenses, discuss the difference between needs and wants. I use use my weekly grocery shop as an example. Explain how your grocery budget may always include staples such as milk and bread (needs) but only occasionally include a special treat such as your kid's favourite snack (want).

Children of all ages can understand the difference between needs, like shelter and clothing, and wants, like a new gaming console, a holiday or a streaming subscription.

Once your child has calculated what they need for the upcoming period, they add this to their expenses total and they will learn this essential life skill going forward

Budgeting: most people get paid monthly do my teens get pocket money and I top up their lunch cards monthly to teach them to plan ahead, there's always lunch food at home to take in so no one goes hungry
Saving: we look at their bank statements monthly, talking about anything spent (with no judgement) and plans for savings, mistakes have been made but we've used them to learn from as I want them to make their money mistakes now while it's smaller amounts and nothing is life changing.
Dh and I live within our means and we discuss money, what's essential vs luxury and how it all works.

I'm a firm believer in cash for kids rather than debit cards as it's harder to understand how much they are spending when it's just a swipe of a card. I pay my 9 year old pocket money for doing chores and he gets half in cash and half into a savings account I control. It's been 4 years of this and he's very good at saving up for what he wants with his cash. He's keeping the savings account for when he's an adult. He often chooses to put some birthday or Christmas money into the bank as he likes to see the balance grow.

A simple lesson for kids is save half spend half.
Birthday money, christmas money etc. Half will go to the bank and the other half will stay in the piggy bank for spending.

Visual goals- so for example, child wants a new video game at £70 - I will print off a saving chart for £70, child can tick off every £1 - £5 they add to this goal until it is achieved. I find this helps massively with the impulse spending of smaller sums like pocket money.