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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My daughter earns money by walking our dog(£1 a day) and when I receive the highlight text message from her school, for her hard work (£1 per text). She decides what she needs to buy next and we both are looking for the bargains on line, to get more for her money.
She has a bank account to save for bigger things too, such as holiday spending money.

When young I still use cash as I think it is much easier for them to appreciate the physical act of spending money. I also encourage saving for the long term and shorter term eg if there is a game they want.

The only 'chore' I've ever paid for is babysitting as I think there is a level of responsibility there which should be recompensed, otherwise my view has always been is that pitching in is part of being in a large family.

Just starting to teach my four year old about money and budgets. It's a tough concept to get but we're off on a special trip soon so we've been counting his pennies in his money box and he knows we'll have to change it to euros. I'm trying to show him how much it costs for things he wants so he knows that that money means he can buy X or Y. -but still a bit young for budgeting really!!

Loads of conversations - constant casual chat at markets, shops, about pocket money on core principles of spend and save. Being open about making conscious choices in supermarkets reading beyond advertising and working out value for money, sending pocket money into an account where interest rates are visible. Talking about savings accounts - he’s only 8 but knows so much! Got to start on the 4 year old !

My DD is 7 and I have been regularly saving for her. I talk to her about how much things cost in terms of 'how many hours mummy has to work' to pay for things. She also has a NatWest Rooster account and last weekend was the first time she used her card. Before she bought anything, we totted up the amount and what she would be left with. That made some decisions a little hard as she was unsure whether to spend the amount as she also wanted 'lots of money left' 🤣 She did enjoy typing her pin number in though and using contactless and I felt it gave her a sense of responsibility but still under my watch

Ds gets £2.50 per week and can spend it on whatever he likes as long as it is age appropriate and legal. He can save or spend . Last week he had acrued £10, so bought a couple of packs of pokemon cards and then got upset that he couldn't buy the magazine in a later shop. It teaches him that he can't blow the lot on things he vaguely wants, as he will have none left for what he really wants. We are going to an event in summer and he has already started planning his saving to get things he really wants then.

My 2 are teenagers and get a set allowance per month into their bank account so they need to make that last.

I also make sure I talk to them about finances when the opportunity comes up - like today I am remortgaging so I talked to them about how mortgages work and DC1 had a go at putting our figures into a mortgage calculator.

He was surprised how much of his salary is going to be spent on a mortgage when he's older!

We talked to our daughter about money from when she was very young and the importance of saving and shopping around. I remember taking her to see a Disney performance when she was 5 years old, and she wanted to buy a Disney princess doll from one of the stalls at the venue. We had allowed her to take £10 from her piggy bank but the doll cost £15. She was in tears when I told her she didn’t have enough money. Luckily I had done a bit of research beforehand. I told her that I’d seen Disney princess dolls in our local supermarket for £7. Suddenly she wasn’t so upset. Now she is at university and very savvy with her money!

Teen dd has a roaster account which we have set up so she has a spend pot, save pot and give pot. We encourage her to split her money between the three equally. And that movement from save to spend has to be either on something she has actually been saving for or a key event I.e. buying a birthday present for a friend.

We also discuss the price of things and if we feel it is value for money as well as the idea of shopping around to find the best price for something instead of buying it on the first website you find it on.

My best tip is for DC to get a job outside of the home as soon as they are old enough eg my DD has done cleaning, babysitting, admin work (data entry), clearing at a cafe, serving at a party etc. This really shows them how long it takes to earn money. I am also very clear about how much things cost, in terms of explaining how much I earn and how long it would take me to earn whatever frippery they fancy. I also showed my eldest my tax return which blew her mind, especially when I explained about student loan deductions! (I don't think taxes had really crossed her mind before...)

We use a stacking clear 'piggy bank' so they can see, and count their money, and once they get enough money they can spend on something they want, or choose to save for something bigger. Last year they saved enough for a garden swing.

Get them to chose an new toy/computer game and set them a savings target of £2 or £3 a week, they will soon see the results, I show mine how I save for a holiday, and this is a similar savings principal, mine get £5 a week so they save and budget for an item and spend the rest - or can choose to save more or less each week - as long as they contribute to their goal

We introduced a couple of simple concepts starting around 5yrs old when needs are simple and behaviours can be understood & shaped.

first: family jobs.
help the family with age relevant tasks - each task may earn 50p (pack away toys) or Help set The table/ feed the family pet.

over time, the job value increase with responsibility ..
load dishes, tidy room to an agreed acceptable standard etc.. you get the drift.

this creates a reward for effort - work ethic
responsibility & family values
Self confidence and degree of autonomy (future self care)
sense of achievement

Over time .. children learn to equate
time with money

you either have the time to do something for yourself and family or
you are time poor and need others to do the job for you & you need to pay.

if a child wants X toy.. discuss the cost in terms of - that will be X family jobs.. do you want to do 10 family jobs. The child can assess if they are wanting or ready to commit to x family jobs (earning).

secondly: with earning.
save half (watch interest earnings, over time)
spending half (towards a need or want) (if it’s a instant gratification then allow.. a child soon learns needs vs wants for an item they really want.

take a photo of a toy. Show savings towards the goal. Parents can help if the behaviour and learning by the child is evident..

Often I found taking a photo - acknowledged the need.. and allowed research or a better deal.
or the need evaporated.

it is important from a young age to use actual coins and notes. This tangibility is important to evidence more and less (once spend).

when buying- let the child pay - hand over the cash - this gives the act of permanece and decision made.

savings - when very young use a jar to see pennies collect.
this exercise can then be used for maths literacy.
how many pennies to 10p / 20p etc and 50p into a £1/ £2 etc.

as the child is older, open an account and let them see you deposit their money into the ac. when the child is at college and needs a money card- spending will be better understood and managed.

We have found our children are more thoughtful of their spending and show gratitude for items especially as teenagers needs become more brand conscious.

DC is 5
Old fashion way.
Money box
All birthday Money goes in, any pennies found are always gathered up, cherished and saved.
He is saving because he wants to go to Ohio when he grows up ( he heard it in a song)

I was fed up taking my children out for a lovely day out & then facing grumpy faces in the gift shops because I wouldn’t buy them some tat so I introduced pocket money at an early age. They each got their age in pounds once a month and they could buy whatever they wanted but once it was gone it was gone. The agreement was they couldn’t ask for presents unless it was birthday or Christmas. My youngest spent months and months blowing all her money at the first opportunity but very quickly my eldest realised that she should wait for something she really wanted. Now they’re both savvy savers and as an added bonus they never nag for presents in gift shops or when out shopping as they’ve learned that they can save up and get themselves things they really want.

Start them young by giving them pocket money which they can do whatever with it. It teaches them the value of money, maths and the need to plan ahead if what they want to spend on is more than what they have. Also important to let them make the decisions even if it means failure to manage their money. Fail with smaller amount early on is better than later on in life

Teaching my 11-year-old to budget and save: A digital approach with real-world experiences. Like many parents, I want my child to be financially responsible. With my 11-year-old, I've found a blend of digital tools and real-world experiences to be effective. Here's how:

1. Ditch the piggy bank, embrace the bank account: Early on, I opened a bank account for him, linked to a mobile app. This allows him to manage his own money independently, track his spending, and even earn interest. It's much safer than a piggy bank and instills responsibility.
2. Make pocket money digital: We transfer his pocket money directly to his account. This simplifies the process and makes it easier for him to track his income and expenses within the app.
3. Visit the bank (we did that once): While the app is convenient, I believe in real-world experiences. We visit the local branch occasionally, allowing him to interact with bank staff, deposit cash, and understand the physical side of banking.
4. Set savings goals: We discuss what he wants to save for (toys, games, etc.) and set realistic goals. The visual representation of progress in the app keeps him motivated.
5. Talk about budgeting: We have open conversations about budgeting. We explain expenses like bills and groceries, helping him understand the value of money and responsible spending.
6. Make it fun: Gamifying saving can be motivating. We use the app's features to set challenges and reward responsible choices.
7. Celebrate successes: When he reaches a savings goal, we acknowledge his achievement. This reinforces positive financial habits.

Bonus tip: Consider age-appropriate financial literacy resources like books, websites, or games to supplement your efforts. This approach has worked well for us. My son is learning valuable money management skills while gaining independence and confidence. While it's a continuous journey, I'm confident he'll develop a healthy relationship with money as he grows.

By giving them jobs around the house, and putting the money into a bank account, and showing them their balance, they can choose to spend or save (saving is encouraged) and I show them how to shop on-line, how savings and interest rates work, and when they buy a large item with their 'earnings' they are proud of their acheivement and will look after the item better.

DD has a rooster card, and we have shown her how to look at her account on-line, save her birthday and Christmas money, and look for deals on-line when she wants to buy clothes and stationery. She has learned to save from the reward of chores, which we transfer to her account. She was able to buy a decent VR headset which she wanted.

My teen dc has a metrobank card, it was so easy to open and you get the card on the day. All open and running and ready to go before you leave the bank. You have the banking app also.

I've found I used to give him eg £20 for a day out with his friends, and would say, give me change if there's any left over, there would never BE any change, he would spend every penny. Now I say, it's all yours, you can keep the change and he is very frugal with it, looks for cheaper days out, cheaper places to eat as he wants to make it go further. so giving some ownership is good. I've also got him into buying second hand electronics and devices and he realises it can save a ton vs buying new.

They get £5 a week spending money (always dependant on behaviour and bedtime) and spend half and save half, We track their savings. Spending money will increase thus should savings. I aim to transfer the savings into an ISA later on, but will let them choose.

When DD was little it was ‘half to spend, half to save’ of birthday money. She would work out how many hours it would take me to work to pay for something. She got pocket money from aged 7 but half went into savings. She had to do chores in house to get pocket money. She enjoyed spending her money on sticker books and glitter pens but sometimes wanted to save up for a special doll or game.

We got her a building society card at 11 and she used it to buy e.g a loaf of bread on way home from school sometimes and it was easy to then pay her back. She got jobs from neighbours at 14 and then a more proper part-time job at 16. She is at University now and knows how to budget well and not waste money, but also has enough to not be isolated. She never missed out on anything she needed but neither was she pampered.

I put away money every month as did my late mother into a child trust find account, This became DD’s on her turning 18 and she has even more appreciated the value of saving.

I show them my household spreadsheet of money in and money out, and what's left after mortgage, utility bills, council tax, and insurances, and how I put some for holidays, savings and my emergency fund.

Earning money for chores, cleaning cupboards, vacuuming and in the summer -weeding. They save half in a bank, and save the rest in their bedroom, once they have enough, they will choose to add their money to the bank, or spend this on a new toy or game. I was so proud when he saved enough for a new bike last year (£196) saved up.

I’ve always given pocket money and not topped it up if they run out. They quickly learnt to save their £1 a week.

what they had left at the end of the month we would give them a ‘interest’ bonus to boost their savings. We would double what they had. They quickly learnt not to buy sweets so at the end of the month they would have about £10.

as they got older we increased the weekly pocket money and now they are teens they both have paper rounds and we’ve found they are amazing at saving as they know they can treat themselves to something worthwhile rather than impulse buy and spend the money immediately.