Six ways to teach your children about money
With the summer holidays now in full swing, many parents will be wondering how to keep their kids entertained over the coming weeks. Finance lessons may not be the first thing that pops to mind but new research has found that kids enjoy learning about money when its mixed with games, jokes and real-life examples.
Research from the Bank of England found that only a quarter of children like learning about money at school. The survey of 1,642 children aged seven to 14 years found they would find learning about money more fun if there were jokes and funny stuff, games, and using real money in real situations.
The research found that young girls are less likely to enjoy learning about money than boys, with just a fifth of girls saying it is fun compared to a third of boys.
HOW TO MAKE MONEY FUN
Start a tuck shop: During lockdown lots of parents came up with innovative ways to give their children real-life examples of spending money while shops were closed.
One option is to have an at-home tuck shop. Each child gets a (theoretical) amount to spend each day and snacks in the house each have a price tag.
This means children must work out budgeting, look at whether they want to save up to buy a bigger treat and do some basic maths to work out how far their virtual pennies will stretch.
You can make healthier snacks cheaper while chocolate and biscuits are more expensive if you want to encourage healthier snacking.
Use the Beano to help kids learn: The Bank of England and Beano have launched some tools to help kids learn about finances and money.
The tools are intended for teachers to use but are available online. There are different lessons for different ages, such as explaining money and debt to ethical spending. It includes things like helping Minnie the Minx to spend her £10 birthday money or helping Dennis The Menace avoid a charity fundraise scam.
Get them to set up a business: You could set your child the task of how they can make some money. They will need to decide on what they want to do or make (this will be age dependent) from offering to wash a neighbour’s car to making some cakes and selling them to people on your street. It will get them thinking about how to set prices, how to sell, and how to make their own money.
Get them to set an end-of-summer goal: Most parents give their children pocket money, but you could use the six-week break to teach your children about saving money.
Get them to think about something they really want to buy and work out how much money they would have to save each week to afford it by the end of summer.
They could boost their savings pot by doing extra chores or selling old toys, and some parents might offer to match any savings or add a proportion to give an extra incentive. This will not only teach your children how to save for something specific but it will also teach them about working towards a goal and delayed buying, rather than getting everything immediately. They could even club together with siblings to buy something together.
Clear out and sell it: Lots of people have used lockdown to clear the clutter in their house, but children may be more unwilling to get rid of their stuff.
You could set them the task of clearing out any unwanted old toys, clothes, shoes or gadgets and then get them to sell the items for money. You could go to a car boot sale or you could sell the stuff online, such as on sites like Facebook’s marketplace, Gumtree, Ebay or Depop for clothes.
Not only will you get a tidier children’s room (hopefully) but you’ll teach them about making money from the things they no longer want.
Set up an investment account: Clearly this involves committing some of your own money but if you’ve been intending to set up some investments for your child, either in a Junior ISA or just in your own ISA, you can get them involved to learn about investing.
It depends on the age of your children as to how involved they can get, but some parents like to invest a bit of money in shares their child may be interested in – such as Disney, Amazon or Netflix, for example.
By investing in recognisable companies you’ll make investing more relatable. You can then use this to explain some of the basics of how investing works, what the stock market is and how buying a Disney DVD on Amazon contributes to those companies’ earnings and therefore share prices.