When you start hearing from your child, ‘Buy me this’ and ‘Buy me that,’ it could be time to start talking to them about money. Before they started talking, they didn’t ask you for anything, and you bought them what they needed. Now that they are talking and asking for things, you need to realise they are starting to have wants and needs of their own. We all want to give our children the best, but is there a line on what they should ask for and get?
When your child asks you for things, whether you are out together or at home, it’s time to start talking to them about money. Before that, they accepted whatever you gave them and didn’t ask for more. At that time, they weren’t ready to understand the concept of money.
They had no personal wants of their own, big or small. Now that they have personal wants, whether it’s a toy, a burger, new clothes or wanting you to take them somewhere that money is needed, it’s time to start talking to them about money. The first thing you need to discuss with them is that things are not for free, that when you buy them something or take them to a paying place, you have to pay for it, and it takes money to do that.
This is when you explain to them that you, the parent go to work to make money, so you can take care of them and give them some of the pleasures in life. You have to pay for every toy, article of clothing, burger or movie they go to with the money you have earned.
This is when you should start teaching them the value of money that, along with fun things and the nice things they have, money also has to take care of them by providing where they sleep, the food they eat and some things that keep a household functioning.
A child younger than six will probably not comprehend this, so it’s better to wait until your child is six or older to teach them about money. At the age of six, they are more independent and in school, so they will start wanting more things than a younger child. Their life is at a point where it is changing anyway: from school and friends to a different daily environment that they’re in.
Once you have talked to your child about money and let them know money is needed to do some of the things they want, let them know it’s not everything.
Now is the time to teach them how to give to receive and how they should start preparing themselves to have money by saving for the things they might want in the future. By the time your child is seven or eight, you should start giving them an allowance for doing things, which is a way to earn money. When they are older, they may be able to do a paper round or a babysitting course to childmind in the evenings after school or college.
Working to earn money is a value they need to start learning at that age. Open up a savings account for them to start teaching them after working for the money; they need to learn how to set some money aside for the future and then enjoy what they have made. Lucas has a Revolut account attached to mine, so I can transfer money in and out for him. He can see how much he has on the app and use the card to withdraw money or spend it in the shops. As with most 8-year-olds, he loves gaming, so I thought I would turn this to our advantage and use it to help him understand money. I found some free money games online, and he has been playing those. He especially likes Lego City Adventures Build and Protect, where he helps Mayor Solomon Fleck build a LEGO city using various buildings, which earn tax revenues that can be spent to help build out the rest of his city.
When you start teaching your child when they are younger about the value of money and how to save it, it will make them financially wiser when they become adults.