“An investment in knowledge pays the best interest,” Benjamin Franklin
We do not give my children pocket money at the moment. Often, they are asked if they get any and they say no. It does not seem to bother them [I don’t think anyways!].
We had the discussion with the girls from a young age, that for chores around the house, they would not be paid. We personally did not believe in them learning to earn money from the menial day to day tasks, and instead looked to educate them around the fact that if they chipped in and helped where they could, then we could all be done with the chores faster as a household and then be free to do more fun things together. We discussed with them, that if they were able to help with something that we otherwise would pay to get done, then we would consider them earning from it. These would be bigger tasks like washing the car or weeding the garden. For now, they are too young for that.
We have also spoken about other options. We had planned for a garage sale to declutter the baby clothes and toys. We decided money raised from the sale would in part be donated to a charity of their choice and in part put in their money boxes for something that may need in the future. By ‘need’ we always have enforced that these would be essential purchases. We did not want them to fall into the habit (as all kids would love), to always buy something or have something bought for them, whenever in the shops and on demand. I may be sounding really strict here… but again not every strategy will be applicable to every one in every situation.
The children come shopping with me every week. When my eldest was not in school, she came to the supermarket with me every week. Now the youngest joins me weekly before I drop her to school. As we go around the supermarket she hears me talk about different prices, and if something has got more or less expensive. She absorbs the mindset when I decide one alternative over another. She loves scanning all the shopping. The eldest is able to understand numbers, so she is in charge of checking the total amount to pay on the screen matches the amount to pay on the card machine, and she makes the payment (using my card). We may have a discount card, or utilise the supermarket app which reduces our bill, and she looks at the total amount to pay decrease, then questions why. This comes from her own inquisitiveness and not all children will want to ask and that is fine. If they are not prompting you, then you should offer up this insight to them.
Whilst most of our payments are cashless now, I am conscious how important using cash is for children. When we have some spare change and the children are at the shops, we get them to pay using the cash. The youngest looks at the coins, and learns to understand their shapes, sizes and value. The eldest has to employ her math skills and understand how much money is in her hand, how much needs to be used for the payment, what is the best combination of coins and/or notes to give to the cashier and if any, what is the total amount of change due back to her. The magic of this is that the cashiers pick up very quickly on what we are doing, and take their time to ensure that the eldest has calculated the change, before the cashier hands the money to her.
As you can gather so far, the best way we have been able to approach the education of our children on money is through communication. Ongoing, constant and practical dialogue. Financial literacy is not a focus in the school curriculum, so as parents, grandparents, family members, siblings etc, we have the responsibility for leading the agenda.
The way we have approached this education may not be the preference for everyone and definitely one size does not fit all. You may well have to try various different strategies (and go down the pocket money route) to see what works best for your child. The key will be to exercise good habits yourself for them to emulate.
It was exciting to see Deborah Medan – entrepreneur and investor, write a book under the Little Experts collection called ‘Why Money Matters.’ The book is targeted at 6-9 year olds however I think children older than 9 would still benefit from it. The book is full of information about earning money, saving as well as teaching children about interest and tax! As you read this book with children, it will spark so much more ongoing conversation.
We have a responsibility to give our children the tools to help them lead a stable future and to gain independence. Teaching them about money matters and having good habits is part of this essential tool kit. We all have to spend every day on food, travel and bills at the minimum, so there will always be a basis for a conversation to begin. Do not shy away from this conversation. Do not understate the importance of this topic.
