Money matters for minors
Start early to form your child’s ‘financial personality’ so good habits with money can last them a lifetimeGROWING UP I remember loving my money box – a pink ceramic bunny with bicycle. It must hold some significance for, broken ear and all, it still resides in my parents’ house among other treasured possessions that I’m sure they’d much rather be rid of. I remember also the pride I felt when I opened my Henry Hippo account and received the eponymous money box.
So I was probably a bit of a nerd but perhaps my parents had better money sense than many. They worked hard, put some away, gave some to charity and when they had extra, they treated us. They also encouraged us children to do the same. Now, as a parent myself, bombarded with the temptations of city living, I am beginning to see the value in instilling good money sense in my own children.
While a three-year-old might not have a clue, a five-year-old may start to notice the prices of things and may begin to grasp that a house costs a lot more than a scooter. As the child becomes more mature we can begin to introduce simple money ideas without overwhelming them.
Trips to the supermarket can provide opportunity for them to learn how much things cost. The introduction of pocket money can teach them that they can buy a few sweets this week or put the money aside and get a comic next week. Parents can begin to explain the concept of working to earn money and that without work there is a lot less to spend. The opening of a savings account can introduce the idea that saving isn’t like a sprint but something more like a marathon.
Carol Dunne, national development officer of community education with Money Advice Budgeting Service (MABS), says that it is important to teach children about money because as members of the family they are affected by that family’s money situation. “By not discussing money, it is harder for the money manager in the family to tackle the tough choices,” says Dunne. “It’s more difficult to say ‘no’, it’s more difficult to say ‘wait’, it is more difficult to get family members to understand economy drives that might need to be undertaken in the household.”
Secondly, she says that as adults they will eventually need to manage their own income and won’t know where to start if they have not been taught at home.
Dunne says that every day situations provide opportunities for teaching about money. “If shopping with children,” she says, “instead of having them add items that catch their eye to the trolley, let them bring back items from your list and tell you the cost, involve them in comparing price and value. Let them look at bargains with you and teach them how to work out whether an offer is the right one for you this week.” She recommends making them aware of some of the bills and letting them know that the money coming into a household is finite and that certain expenses need to be prioritised.
Emma Kennedy is author of Megan and the Money Tree – a terrific resource for parents and educators. The book contains an easy-to-follow allegoric tale about Megan and her parents who make money selling apples until their apple tree blows down. The children’s chapters are followed by chapters for parents in which simple questions and activities are suggested to introduce basic money ideas to kids.