As you know, I am laser-focused on improving my financial mindset. So I couldn’t help wondering about my childhood. If I had had more help on being financially savvy when I was young, maybe I would have avoided past financial mistakes?
Eileen, over at Your Money Sorted also debates this in her article, and points out that children’s money mindset is formed by age 7. So, it creates an urgent need to make the children aware of how to deal with money and budget effectively, so when they are old enough, they can make informed financial decisions.
This got me thinking about ways to introduce money and budgeting to kids. So here a few creative ideas that I have sourced. They are inspired from UK money bloggers and others – I hope it helps you make a start.
1.Play Fun Games
Role Play Games with Little Ones
When teaching your kids about money, Emma, over at the Money Whisperer recommends playing fun games with young children. She reviews four top games, that encourage role play of different situations. Pop to the shops for example, enables the children to take on real life scenarios and practise using money – the great thing about this that it is hidden within a fun game.
For teaching children between 5 and 8 about money, Catherine from The Money Panel suggests games likes good habits about money . It’s a great way to teach them about the role of the bank, paying money for tax, giving to the community, receiving income in the form of rent and what happens when you can’t pay up! She has written a fabulous post that details how to pass on good habits about money.
2. Set a Small Budget
Simon has a practical, real life scenario – ‘One of the tactics we try and use is giving our 5 year old a set amount of spending money each day when we go on holiday. As he gets used to budgeting, we’ll give him a weekly spend budget’. You can find his blog, penniesforthepiggybank here.
3. Set Up a Clear Savings Jar
What could be more fun than teaching saving skills to children, by physically seeing savings grow inside a clear jar?Joseph, from The Thrifty Chap, suggests setting up two jars. Label one as saving and one as spending. You could also have a jar with Sharing written on it, if you wanted to introduce spreading financial love to loved ones or charity. His blog is full of fab money saving ideas generally. You can find it here.
Save Jar Approach
Savvyinsomerset has a complete post which fully explains how you to set up a save jar. It’s full of suggestions for conversations you can have and how to record saving and spending. Her blog is definitely worth a look for a wide range of tips on saving and personal finance. She offers practical, easy to break down solutions.
4. Try Memorable Visual Examples
Faith, over at Much More With Less, suggest using visual examples, such as using chocolate.
She says, ‘When my daughter and I were in a supermarket, we had a look at all the different versions of Cadbury’s Caramel. We looked to see which version gave her the most for her money. It really made her think about where to spend her limited pocket money.’ You can find her full post here. The conversation she had with her daughter really highlighted what we can teach through decision making in a real life situations.
5. Talk About Needs and Wants
To teach your kids to budget money effectively or generally about money, Faith also suggests talking regularly with children about needs and wants, what the differences are and how this impacts on our lives. Check out the article here – it contains suggestions for conversation starters, which is mega useful and will save you a lot of time.
6. Get Older Children Involved in Household Budgeting
Jennifer, at My Mummy’s Pennies comments: ‘My 11 year old loves cooking, so we encourage him to plan out menus and budget the shopping costs for ingredients needed and work out the price per serving. He really enjoys this and it makes him much more aware of the value of money than any other ways we’ve tried.’ Getting involved in real-life things that are important to the family as a whole, can be really useful when teaching children to be financially savvy. You can view her excellent blog here. It’s absolutely crammed full of financial tips for families!
7. Teach them to Pause and Think
Michelle, over and Time and Pence talks about the importance of teaching children to step back from a possible impulse buy and think it through first. She asks the question to her son – ‘Do you really need it?’ She says that, quite often her son will decide that the purchase is not worth it and save up for an item that is bigger and better. Her blog is well worth a look and has given me loads of new inspiration.
So, to conclude, there is a resounding opinion out there, that it is never too early to start teaching kids about personal and family finance. The resounding conclusion is that the learning should be fun, set in a real life context and scenarios practised as games, as many times as the child wishes.
It also seems to be important to teach children how to be controlled and measure their financial decisions. Finding joy in simple, cheap activities in an ever consumer orientated world, seems to have become the most important thing to hang on to.
Has this helped you out as a starting point for teaching your children about money and budgeting? Has it reminded you of your childhood? What financial lessons did you learn or not learn while growing up? Feel free to share and comment below with your thoughts and creative ideas!