Vanessa Cameron, Qwiddle founder, former banker and mum of three, shares her advice on teaching children about money. Larger Family Life readers can also receive a £5 credit when they open a Qwiddle account. Read on to find out more:
You can often hear parents chatting about how much pocket money they give their child or at what age. Of course each child is different and not all of them are going to respond to having their own money in the same way; some children are likely to lose it, some may save it and a great deal of them will readily spend it on sweets and pocket money toys! However on average, parents start to give their children regular pocket money around 8 years of age. Despite this research shows that the sooner you can start to teach your child about money, the better their chance of developing healthy money habits.
As a parent of three boys I’m aware that many conversations about money in the home can easily disintegrate into conflict. Tantrums in the supermarket over the sweets or toys, the ‘I wants’ ‘must haves’ and ‘why nots’ can be exhausting, not to mention the toxic arguments once our children reach their teens!
When my children were very young I, like many others, was frustrated by the lack of resources available to parents in support of financial education. I wanted to be able to teach my children how to spend sensibly. I wanted them to start thinking about how to set goals for things they really wanted, to budget and save up for them independently. I was aware that there were child savings accounts for parents but nothing that actually helped children to learn about money in a hands on way.
This is when I struck upon the idea of Qwiddle. A free online site designed specifically to help children learn about money, Qwiddle uses the PayPal platform and provides a secure environment in which children can develop good money habits. Children are able to open their own Qwiddle PayPal account – which is supervised by the parent – and are encouraged to set their own goals for things they really want, as opposed to impulse spending. Likewise they’re taught the valuable lesson that money is precious. Parents also have the option to set tasks for their children so they can earn extra money towards their goal making the connection that if you really want something you have to work for it!
In addition to giving children the opportunity to handle and spend small amounts of money it’s incredibly important to involve children in conversations about money in the home. This may already happen in your household and whilst its not the obvious tea time conversation there’s many ways in which you can introduce even toddlers to money concepts. Remember that in the same way you might encourage your children to eat fruit and veg or to brush their teeth, a healthy attitude to spending can be developed via your child’s early interactions with money.
So first things first – why is it so important to teach our children about money? Surely school does that? Not really. Following one of the worst recessions of recent times and crippling levels of debt, the government has now put financial education on the curriculum. However whilst this is a good start it’s still only a small part of the PSHE subject. Culturally a lot has changed; we now have payday lenders on the high street, credit deals in every store and our obsession with consumption, fuelled by marketing that now invades so many aspects of our lives, means that our children are in real danger of becoming unbridled shopaholics. So it’s more important than ever that we are stepping up to the plate and teaching them how to handle money intelligently and responsibly.
In fact some recent research by the government organisation the Money Advisory Service found that 57% agreed that parents were the biggest influence on the development of children’s money skills, yet over half of parents said they found it hard to talk to their children about money matters.
If we can start to introduce rational, sensible attitudes towards money in the early years it will stand our children in good stead fro the future. Having said this don’t expect miracles; tantrums in the supermarket with your toddler are all part of the learning experience, as long as you stick to your guns and don’t give in! Let very young children handle money help them to put pennies in a glass jar to represent different items such as sweets or a toy, this will start to educate them that some things cost more than others.
As your child matures encourage them to choose appropriate goals and to stick with them. Help them prioritise and stay the course, peer pressure is powerful and when they’re being swayed tried to keep them on track; the real reward will come when they finally reach that goal!
And remember whilst there’s a lot of emphasis on saving – which is very commendable – we need to give our children the opportunity to use money independently. How on earth can we expect our children to save, economise and make savvy decisions if they don’t know the first thing about sensible spending?! The two are intrinsically linked. If you can give your child the opportunity to handle money now then they can learn there are consequences, both good and bad, when spending and this hands on experience will help them to become responsible with money.
As a special offer for Larger Family Life readers, Vanessa is offering a £5 balance for every new Qwiddle child account opened before the end of May 2015. Visit www.qwiddle.co.uk to sign in, for further information please email firstname.lastname@example.org.