Teaching Kids The Value Of Money
When my son was given a twenty pound note for his birthday, I thought his eyeballs might just pop out. He genuinely had never had so much money in his hands. To this day, he hides away his twenty pound note as if it were a diamond jewel. He doesn’t know what he wants to do with it or buy with it. Even the thought of how many football cards he could buy with it just blows his mind. But rather than waste it on plastic toys, cards or magazines that give five minutes of fun, I questioned him on whether it was worth him keeping his money safe and saving up for something special. This got him thinking and to this day, his trusty twenty-pound note is safely tucked away in his wallet.
To us, a twenty-pound note is something we use all the time, but to children this is a lot of money! A very generous birthday gift from a family member which has somewhat managed to perplex our seven-year-old. This situation made me think about how better we, as parents, could be educating our children on the value of money. I also wondered if professionals from the finance sector go into primary or secondary schools to talk to kids about mortgages and tax, or whether this was something we all end up trying to figure out on our own? I since found out that schools are now required to teach children financial literacy as part of the National Curriculum, this only takes place after the age of eleven. By this stage children may have already picked up some initial habits from their parents, both good and bad. So, is talking about the value of money at eleven years old too late?
The world of credit cards, online banking, tax codes and financial investments can be tough for adults to understand, let alone the kids. So, it is important us for us to teach our children some basic economic ideas from a young age to prepare them for their financial futures. A simple way to start teaching kids about money is to simply let them have it, and cash is a great start. “Cash is a tangible object,” said Gwen Tulin, founder and artistic director of Brain Arts Productions, a group that runs birthday parties, camps and other events that incorporate financial literacy with the arts. “You see it’s there and then it’s not.” If you’re uncomfortable letting your kids have actual money, get creative. Whitlow told HuffPost his family made bills featuring one of his kids’ faces that she was able to earn for various tasks.
Natalia Oberti Noguera, founder and CEO of Pipeline Angels, which promotes angel investing for women and non-binary femme entrepreneurs, noted that it’s important to introduce kids to other economic ideas and to associate money with their lives as adults. “We’re getting better at having kids think about entrepreneurship,” Oberti Noguera said. “We can talk to kids like, ‘Hey, if you’re interested in start-ups, you can get a job and climb the ladder. You’re actually going to be building wealth and you’ll be able to invest.’”
Money isn’t just about buying “stuff”
We forget that money doesn’t just need to be used for buying “stuff”. One of my friend’s sons at school had asked for his buddies to donate to the charity of his choice instead of buying him a birthday gift. I was so struck by the maturity of this boy and how even at a young age, they can understand that money can be a powerful way to help others. Money is always tempting to keep to yourself. In life, your children will need to understand that some people are more privileged than others. BusyKid incorporates a list of charities to which kids can donate, and Goalsetter breaks down three different ways in which it lets kids categorize their goals: saving for the future, saving for things and experiences, and sharing with others. The last designation encourages kids to pay it forward with money they’ve earned.
If you want to start talking to your kids about understanding money, there are some easy steps to get started:
Give them a piggy bank
Help them with their basic maths at home by counting coins
Open a bank or savings account
Help them to set a pocket money goal or reward chart
Encourage them to be independent on what they do with their own money (if they make poor choices with their money, they will learn from it)
In summary, it is great to have these conversations now. The way children view money will often carry through into adulthood, meaning it is important to give kids a good financial grounding from a young age. Teaching children and teenagers the basics to help them understand the true cost of independent life. I wish my parents had spoken to me more about money, tax and mortgages!
I’ll try and remember to keep you updated on what my son decides to do with his twenty-pound note. I just hope no one every gives him a fifty pound note as I fear he may just collapse with shock.