The world of money can be daunting to anyone, but especially children. While financial education is now compulsory for secondary school pupils, it’s not on the curriculum for primary school children. Teaching young ones how to manage their finances from an early age can put them in good stead for the future.
Share Radio’s Consumer Champion and presenter of the Consuming Issues Show, Georgie Frost, shares her top tips for parents and grandparents wanting to teach children the world of finance
1. Hard work can pay off
Help children understand the value of money by setting them chores about the house such as taking out the rubbish, washing up or hovering. Each chore can have a monetary value set to it. By incentivising these chores, they’ll soon learn what it means to work for their money and also begin appreciating the value of money.
2. Encourage saving
It’s never too early to teach your children how to save. It’s important for children to understand that just because you have money doesn’t mean it needs to be spent all at once. Like most, watching your cash grow can encourage you to save even more. Try using clear jars as this will help your children to visualise their pot of money. Then when they are given pennies they can add it to the jar. Before you know it the jar will be full up.
3. Play games to get children thinking financially
Help your children with their financial literacy skills by playing fun family games such as Junior Monopoly, Payday and Money Bags Coin Value. Games like Junior Monopoly can provide an introduction into budgeting, spending within your means, financial planning and calculations. Make sure you join in too to help and encourage them throughout.
4. Get them involved in shopping
When taking children food shopping, why not use this time to teach them the art of budgeting. It’s also teaches them the value of products too. Give them a calculator, a budget and a list of four to five items you need. They can then find these items and make sure they are sticking within the budget they have been set. As a reward, any spare change could go towards a treat!
5. Understanding financial jargon
Make sure you teach your children financial jargon. Not understanding the meaning of APR on a credit card or an overdraft can really make or break a credit score. LifeSkills created by Barclays, found that even amongst 14-25 year old, more than a third (36%) didn’t know the correct meaning of APR. Give your youngsters a head start and try visiting sites such as Pfeg and LifeSkills, which have numerous resources that can teach the basics on financial terms.