Money is a complex matter, so we need to be very clear when teaching our children to be money-savvy and help them set up good habits for life.
the power of money
We can’t help teaching our kids that money rules the world. How many times do we inadvertently give them that message?
- We can’t buy that toy, it costs too much money.
- I can’t stay at home to play with you. I have to go to work to get money.
- You can’t have a ride on the supermarket rocket. It’s a waste of money.
- Oh no, not another letter from the school. I bet they want more money.
- Be careful with my handbag. Don’t touch it. All my money’s inside.
money too early
It’s never too early to open a savings account in your child’s name. But when is it the right time to give them pocket money or let them handle real coins when buying things at the local dairy? If your child cannot calculate how much a $1.50 bar of chocolate and a $2 ice-cream will cost, or how much change they should receive from a $10 bill, it might be too early to make them responsible for real-money situations. Similarly, before they get pocket money, they should probably get a feel for the difference in the price of a packet of biscuits as opposed to a plane ticket to visit Nana.
money-money-money, it’s not funny
A friend of mine learnt the hard way why giving children responsibility over money may be tricky. Sarah (not her real name) thought she was a wise parent when she introduced a weekly $2 sum of pocket money for her 7-year-old with the rule that he could spend it immediately on sweets or save it for a few weeks and then buy a more expensive item. Sarah was proud of her son for choosing the savings option. She didn’t keep records of how much money her son should have saved up at any given point, but she was a little surprised to see how often he could afford to buy things. The penny dropped, so to speak, when she noticed him taking coins from her purse. He admitted to doing it on a regular basis, as he didn’t know there was anything wrong with it.
“We taught him the importance of saving, but we forgot to teach him the right and the wrong way of obtaining money,” Sarah confessed, still shocked by the irony. “He knows not to take toys that belong to other children – toys are individual and special, but it’s a bit different with impersonal $2 coins.”
In the absence of a clear rule, it’s an easy error of judgement for a child to make. So, when teaching your child about money, remember it’s a complicated matter, something that even adults struggle to get right.
questions to ask yourself
Before you embark on the money journey with your child, it’s worth considering your and your partner’s attitude to the following issues and working out your family’s philosophy when it comes to such matters:
- Would you be happy for your child to receive money as a birthday present from her school friends?
- Would you let your child give money as a present?
- Are you prepared to pay your children for household chores such as washing your car, picking up toys or weeding the garden? Or are household chores responsibilities that shouldn’t
get rewarded financially?
- Is it okay to withhold pocket money as a consequence for poor behaviour?
- Is pocket money a reward for good behaviour?
- Is pocket money to be saved up or spent?
- Is your child allowed to spend their money on anything they like, for example, sweets, chewing gum, or plastic guns even though you may be opposed to such toys?
