Helping kids to manage money

Ten helpful tips for teaching your children the value of money and how to look after it.

  1. Although it is sometimes frustrating, let your children work beside you and help you with the household jobs. Foster it when they are young so that they develop the skills needed and a positive attitude that helping is part of belonging to a family. This should make it easier to get them to do these jobs independently when they are older.
  2. Instead of bribing kids with money to do household jobs, foster the value of “work first, then play”. When speaking, use “when” instead of “if”. For example, “When you’ve made your bed, then you can go to your friend’s house,” rather than, “If you make your bed, I’ll pay you your pocket money.”
  3. If children want to earn more money for something special, then you can pay them to do an extra job like cleaning the car or wiping out the kitchen cupboards. Talk to your children about how they could make money from the skills/interests they have. For example, if they love animals they could start a dog-walking service, or if they like gardening then maybe they could grow produce to sell.
  4. A good way to help older children save toward a goal like a handheld game or a car is to make a matching grant for their savings. For example, when they have saved $20, add another $20 to their savings. Talk with your child before saving begins and set down when you will make each grant and for how much. Make sure they save a good amount first, before you add to it. If they are saving for a larger purchase like a bike or car, then you can set periodic saving/grant goals – e.g., when they have saved $50 themselves, then $100 themselves, then $150 themselves, etc.
  5. As soon as your child has the skills to understand interest and has a regular income of some sort, then talk about how they can grow their savings faster with interest. If you don’t feel confident to do this, then make an appointment with someone at a bank or ask a friend who is knowledgeable in this area.
  6. With older children, teach them budgeting by involving them in planning something like a family holiday. Set an amount to spend, go through the fixed expenses and then let them help choose what to do with the left-over spending money.
  7. It is easier for a child to understand the concept of charitable giving if they have a physical experience. For example, take them to the SPCA and talk about how people donate money to keep the shelters open and care for the animals.
  8. Avoid buying something every time you go to the shops. And before you buy something, first ask yourself: “Do I really need it? Is it a good investment of my money?” Whenever your child wants to buy something, ask them: “Do you really need it? Is it the best use of your money?” Show them that if you can’t find what you want or there is nothing you need then it is okay to just browse and come home empty-handed. And avoid taking your children to the shops for entertainment. Be creative ... there are lots of places to go that don’t cost a lot of money and are far better for your child’s (and your) mental and physical health.
  9. Put a “no junk mail” sign on your mailbox – it will remove the temptation to buy something just because it’s on special and help care for the environment at the same time.
  10. And remember: buying more stuff when you owe money on what you already have is like trying to build a castle over a hole. You have to fill the hole first to give the castle a firm foundation.
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