“Money doesn’t grow on trees you know.” How many times were you told that as a youngster when you pleaded with your parents to buy you something?
Chances are, that was the extent of your first lesson in managing money yourself and you were left confused as to why you couldn’t have the latest must-have item you’d seen.
It’s why it’s so important to teach children about money from an early age, helping them understand what money is, how they can use it in everyday life and, most importantly, how they can save it.
To help, we’ve put together five simple ways you can make saving money fun, entertaining and educational.
- Make a pocket money chart
Pocket money is a great way to teach your kids about money. As well as giving them responsibility for looking after their own money, it also gives them a sense of independence about what they can do with it.
You can also use pocket money to teach children two of life’s greatest lessons: to buy the things you want, you need money, and to get money you have to earn it.
Tell them that in order to receive their pocket money, they first have to earn it by performing tasks round the home, such as tidying their room, helping with the dishes or even getting their homework done early.
Why not try to add a fun element to it. Put a pocket money chart on the wall showing which jobs they can do and add how much pocket money they’ll earn for each one they complete. Before you know it they’ll be asking for more jobs giving you a chance to relax and put your feet up!
- Start a savings jar
A savings jar is still one of the most tried, trusted, and traditional ways of teaching your young ones about the importance of saving. Tell them they need to fill it up until there’s no more room left and when they get some money, for example pocket money or for their birthday, they should put it in the jar.
As well as starting them on their savings journey, it also gets them used to handling coins and notes so they get used to money as a part of everyday life – you can even use it as an impromptu maths lesson each time the add, or take from the jar!
Once you’ve got your little one in to the habit, you can get them extra jars – try labelling each one, such as ‘spending’, ‘sharing’ and ‘saving’. Whenever they get money, tell them to split it equally between each jar.
Money in the ‘spending’ jar can be used for small purchases, such as sweets; money in the ‘sharing’ jar can be used to go to someone they know who needs it, like a charity; while the money in the ‘saving’ jar can be used for bigger purchases, for example the latest game they may have their eyes on.
- Create a savings goal
Set your child a challenge of saving for something they really want. Make sure it’s something that’s not too expensive so that it won’t take them too long to save up for and they don’t get frustrated whilst they wait.
Every time they add some money to their savings jar, help them count their money and talk with them about how much longer it will take for them to reach their goal. Not only will it teach them the importance of patience as they wait for their savings to grow, it will also teach them how saving will eventually help them buy things they don’t have enough money for right now.
You could even encourage them to do more chores around the house for extra pocket money to help them reach their savings goals sooner.
- Open a child savings account
Once they’ve got used to the concept of money and saving, you may want to consider opening a savings account for them. Having their own account can help them to develop an even greater understanding of money and nurture good savings habits for the future.
A child savings account works in much the same way as an adult savings account. They’re simple, safe places where they can save their money, and they get to earn some interest too.
Most savings providers give you the option of opening an account with a parent or guardian as a trustee, or if you’re sure your child is ready to manage their own money, then providers will often allow children over the age of seven to operate their account themselves.
- Get online
Children love the latest gadgets and thanks to smartphones, laptops and tablets, you can teach children about money in a fun way they can relate to. There are lots of websites and apps out there with games and videos that teach children about earning, planning and saving money. Some of them even offer a debit card so youngsters can spend their money, but never allow them to go beyond what’s in their account so there’s no danger of them going overdrawn and getting into debt.
Whichever way you choose to talk to your child, it’s important to remember it’s never too early to teach them about the value of money.
You’ll be giving them the confidence and knowledge they need to start saving and planning for the future, as well as valuable skills which will stay with them for the rest of their lives.