'What Could Your Child Teach You About How To Talk About Money?' previously appeared in The Huffington Post, 1st September 2017
It's well known that children learn by doing. And so, when it comes to teaching them about money, we shouldn’t be leaving it up to school, but giving them practical lessons and hands-on advice at home, too.
From giving children greater control over what, where and when they spend, to setting savings goals, there is a lot that we can do as parents to instil the value of money in our children.
But it’s also important that we talk to them in terms that they understand and with examples that they will experience. For instance, we’d never explain compound interest to a 9-year-old, and so we should also be careful not to talk about money in quantities children won’t experience for years, otherwise the lessons become academic.
You’d be surprised how often children talk about money in the playground and how clued up many of them are. My daughters regularly chat to their friends at school about how much money they have saved and where they can hunt out a bargain. Similarly, my sons love to complain when they spend a ‘packet’ on a Playstation game that their friends found cheaper elsewhere! In fact, some of the best examples of how to talk to children about money come from children themselves.
So, what do the children think?
We found this out when we asked our young users for money saving advice that they would share with people their age. We were inundated with fantastic advice from a host of savvy savers and eagle-eyed bargain hunters who could teach adults a thing or two when it comes to talking about money.
For example, Rion-Jensen (aged 12) sent in crisp and clear advice on how to save money in terms his school friends could easily understand. Knowing he gets £15 a week to spend on lunch at school he saves money by bringing in a drink from home. This small change allows him to save £5 a week.
And when it comes to spending, we received equally good suggestions. Rion-Jensen, for instance, memorably advised his fellow young people not to let RRP ‘become RIP to your finances!’ Ultimately, he advised that next time you go shopping ‘remember to check the price and make a mental note of the RRP, then next time use it to compare against the price in the shop, as you could make a potential saving.’
On a similar note, sixteen-year-old CK sensibly suggested that her fellow teen shoppers should think about planning expensive purchases in advance to see if you can’t find the same items cheaper. As she puts it: ‘I know those boyfriend jeans are just a must have, but why spend £40 now when you can wait for a sale that’s just around the corner?’
We should always go the extra mile
As well as ensuring that we talk to children in terms they understand there is a broader point for parents here, too. Conversations about finances between children and teenagers are already happening and, with guidance at home, parents can help fuel the discussion and can provide additional money management tips for their children to discuss.
For instance, to help them appreciate its value, parents could start by encouraging their children to start thinking of their money as an allowance rather than pocket money, or they could start helping them to save for long-term goals. Seeing each other save and hearing about tips for staying on top of their money from their friends can offer powerful examples for children. Our children are talking to each other about money, so let’s be sure they have good advice to pass on to their friends!