I feel like when it comes to talking about money the British and Irish get in a bit of a muddle. On one hand we have the built in urge to not discuss these things but on the other, we love a bargain and take great pride in a fantastic deal or saving. I don’t know about you but the joy of shopping around and knowing i’ve got a great price is part of the satisfaction of a new purchase and telling people about it only increases those feel good vibes.
This same dilemma definitely impacted my life when it came to introducing the concept of money and savings to Luisa. I wanted to protect her from the knowledge that some people have more than others but that’s just not possible if you want to foster empathy and a good attitude to spending. The last thing I want is to raise Luisa to have no concept of money – for a start it means i’d have to listen to endless requests for toys! Of course, she is almost four, so she’s a bit of a magpie but we’ve started to educate her about money and it is having an impact.
How to get started with ‘money chat’
The first concept I decided to focus on was that money is not a bottomless pit. That meant saying no to certain purchases and explaining why. I quickly realised leading by example was key here. It’s not effective enough just to turn down requests for things she wants – I had to let her see and hear me deciding to make sacrifices and better choices myself. It’s pretty simple when you think about it – we all weigh up a purchase in our heads first, so just do it aloud.
I feel like the next step is introducing the idea of the value of money. So how some items or experiences are worthwhile and some are perhaps not. A really good example of this for younger children is when they buy one of those silly packs of sweets that’s made to look like a toy – you know the ones with the PawPatrol figure heads or similar. There’s not many sweets inside, they aren’t very nice and you can’t really play with them later. Of course – Luisa is 3 (almost 4) so rationalising doesn’t always work but I feel like when she’s disappointed with a purchase that’s a prime opportunity to talk about how she could have spent her money instead.
An easy way I can model the same behaviour is to take my own hot drink on a day out. Yesterday we went to the museum and brought travel mugs of coffee with us. Whilst Luisa waited for us to leave I talked about how it was so much better not to use paper cups and how bringing our own coffee saved money – so we could have a free day out and more time for playing. These reasons were age appropriate and she saw a direct benefit when I pointed out how long the queue at the coffee shop was and reminded her we could go straight to the interactive art room – her favourite part of the museum.
Introducing the concept of savings
As Lu is turning four in May we want to start finding a really good visual way to teach her about savings. We already put some of our own money aside for her savings and top it up when she gets cash gifts for birthdays or Christmas. Previously we just had a simple adult savings account that Matt and I could both access on our phones but I’ve been reading about a junior isa available for under 18s. You can set up a regular direct debit or deposit money as and when. It’s a really great, tax free, way to save for your childs future so we’re exploring that currently.
Savings are definitely a tricker topic to discuss with three or four year olds because the tangible benefit or reward is delayed. One idea I had was to let Luisa pick a specific thing (item or experience) to save for that she could afford within a few weeks. This approach introduces the concept of delayed gratification but it doesn’t take so long they loose interest. You could easily make a visual chart and have your child colour in or tick off a square every time they put X amount towards the total so they can see their progress.
I know some parents of slightly older children offer them a choice when they earn money or receive a cash gift – They give them the option to spend it, or save it. If the child chooses to save the parent supplements it. So you can either have £2 now, or £4 if you pop it in the bank/money box. I thought that was a clever idea for primary school children.
More easy ways to make ‘money chat’ normal
- Introduce pocket money – you can use it to bring in the concept of spend, save and give.
- When you’re making a picnic or prepping a packed lunch chat about what’s in it, why it’s a smart money decision and the direct benefits.
- Play shops at home – model having to make a decision based on how much money you have with you and what’s on your shopping list.
- Reward children financially for chores – this is a bit controversial but if it works for your family, great.
- Use cash when you can – it makes money a LOT more tangible for adults and children.
- Remember to lead by example and talk to your children about your own financial decisions in age appropriate ways. Let them see you making good choices that they can understand.
- Plan free days out to attractions and talk aloud about how wonderful it is that X museum, library, gallery or park is totally free.
- Have them join in when food shopping – let them pick out their own snacks and introduce choices based on cost and value for money.