How to Talk to Your Kids About Money

The way we use and carry money may have changed over recent years, but the importance of understanding the value of money hasn’t. Many parents are anxious that this isn’t a skill that is always taught well in schools and feel that they need to do their part at home. If you’re thinking about introducing concepts such as spending, earning, and saving at home, try these simple tips which can make the process smoother and clearer.

Go Shopping With Your Kids

Ask your kids to write a grocery list and then get them to do most of the work in-store. Before you pay, make predictions about how much the shop will cost (you can even try and keep a tally in your head). Compare your predictions with the real bill, and talk about why predictions were lower or higher than the actual cost. The next time you go shopping, take a calculator with you and add up the products as you move around the store. Talk with your kids about whether they think the shop is good value or not. Children are often surprised at how much the basics can cost, so it’s important that they realize how quickly items add up.

Careful Conversations

Kids find money—and its associations with the freedoms of adulthood—very interesting indeed. You can rest assured that anything you say about the state of your own finances or anyone else’s will be repeated in the school playground the next day. Therefore, one of the things you need to teach your kids when it comes to money is the importance of maintaining privacy and keeping some things secret. Don’t divulge everything all at once – if you want your children to know about the family’s finances (and some parents don’t want their kids to have this information), build up slowly and be sure that you can trust them not to share it outside the home.

Provide Some Pocket Money

It’s up to you how much pocket money you provide your children with, but most experts agree that it’s generally a good idea that this money is earned in some way. Whether you pay out pocket money depending on the amount of homework your kid has done that week, the amount of times they’ve washed the dishes, or in recognition of the fact that they cooked a family meal, try and be explicit that pocket money (like real life wages) isn’t just “money for nothing”.