How to bring up financially savvy kids

I hope my mum and dad will forgive me for saying that we had what could be described as a ‘financially somewhat turbulent’ childhood. Circumstances did not always work in our favour let’s say. Not that I mind at all. In fact, if anything, lacking financial security as a child has had a lot of positives; it has certainly made me appreciate the value of money, and how important it is to be careful with it

I’m not saying I’m a massive scrooge or anything, I like spending it too, I’m just respectful at the same time. They say that money can’t buy you happiness, and I totally agree with that, but a lack of money certainly isn’t fun, and so it’s important to have a good attitude towards both saving and spending.

As part of my current project with NatWest Money Clip, and with the help of my daughter Bee, who’s now 20, I’ve been thinking about children’s relationships with money, and how this impacts their financial health as adults, to try to come up with some strategies for teaching children about money management. NatWest have some great resources on their Telegraph finance hub too, so do check those out if you’d like more information.

My first question then, to get you thinking – how have your financial experiences as a child shaped your relationship with money as an adult?

“I’m pretty bad when it comes to money,” Bee told me, “as in, in my purse I have about £35 and I don’t even want to look at my bank account. It’s not that I don’t know how to save money, because I know all I have to do is just not buy things. But then I think, money is for spending right? That’s why we have money, to buy things. I’m going to spend it at some point, so it might as well be on this pair of shoes now than on a house in 10 years time. You can’t doubt my logic.”

That doesn’t sound like I’ve set Bee up terribly well does it? I prompted her further, to see if she had inherited any pearls of financial wisdom.

“There is something I always remember you telling me,” she said, “that I always tell other people when they are worried about money. You told me “money is like the tides. Sometimes it flows in and sometimes it flows out. So don’t worry if it seems to all flow out at once, because it will flow back in eventually.” When I say this to people they get really annoyed. I don’t know why. I try to live by this advice but quite often the money doesn’t just flow back in. Which is why I have none.”

Hmm.

I do believe that money is a bit of a flow of energy, and sometimes you do just have to have faith, but perhaps there are other, more practical things that we could be doing, as parents, to help bring up more financially savvy children.

Use money from a young age as part of play

I have to admit that as a parent, ‘playing shops’ was one of my least favourite activities, but as a child, obviously, I loved it. My sister and I had all sorts of variations on the theme, but the key thing was that they all involved money and attributing value to things. We used to love playing cafes and creating menus, and it’s that sort of thing that really gives children an idea of how much things are worth.

One of our favourite games was playing ‘estate agents’. Sure, it didn’t win me many friends at school, but when you think about it, it was actually a really brilliant financial activity. Not only did we know how to price up fish and chips in our cafe, but we had an idea of what you could get for your money on the local property market. We were clearly ahead of our time on the financial education front.

TIP – This ELC play money set has pounds, euros, a credit card and a cheque book, so you can teach children about cash, credit and currency. Pretty cool right?

Which games involving money did you enjoy as a child?

Make saving fun

We live in a far more ‘instant’ world than we did when I was growing up. When you want something nowadays, whether it’s a takeaway, a film, or some other sort of treat, you want it now. Ideally you also want to not have to move very much to get it. Teaching children the art of delayed gratification then is crucial – they need to appreciate that the world isn’t horribly unfair just because you can’t have exactly what you want right away, and that actually, you value something a lot more if you’ve had to wait for it. Opening an account for your child is easy with the variety of bank options for kids and teens.

NatWest has 7 good tips to help making saving fun for children, including genius ideas like having different coloured savings jars for different things. Giving children this sort of control, and allowing them to decide how to allocate their own money, is a great first step on the road to financially savviness. There are some saving advice for teens too, who might not be so easily impressed by glass jars.

TIP – Check out these mason jar piggy bank craft ideas – if children have made the jars themselves they’re more likely to get excited about the prospect of using them.

How do you encourage your children to save?

Make them work for it

There’s nothing that quite makes you appreciate the value of money like having to earn it for yourself. That £4 magazine with crappy free gift doesn’t seem like such a great idea when you’ve had to wash a whole car and mow a lawn to earn the £4 in the first place does it? Suddenly you think twice about blowing all your cash on fizzy strawberry laces and foamy banana sweets.

“There are a few tips I have learned over the years when it comes to money,” Bee told me. I thought briefly that she might mean from me, but no. “One is from Monica Geller from Friends,” she said. “She tells Rachel, “yeah we’ve all got jobs, it’s how we… buy things.” This is wise advice. Jobs are very important if you want to get money to buy things. I would recommend having one that pays loads of money. Don’t get one of those ones where you don’t get paid a lot. They’re rubbish.”

Sound advice from Bee there.

TIP – Take a look at these eight ideas for ways for kids to earn money.

Did you earn your own money as a child? What ways have your kids come up with for earning some extra cash?

And that’s it – the extent of my wisdom! I’d love to hear from you though about your experiences with money as a child, how they have shaped your finances as an adultDid your parents have a good credit score and set you up for a healthy financial future?

Please do leave a comment!

Image credits – IULIIA BLIZNETSOVA, Jenn Huls,  abdrahimmahfar, Africa Studio, Maria Symchych – all from shutterstock.