Last December I was invited along to a dinner with VoucherCodes.co.uk to discuss family finances something they have been researching for a while. Unfortunately, I was too poorly to go along so I sent my husband along instead. He came back brimming with ideas and some interesting thoughts. As a result of that discussion and some more research Voucher Codes have produced a white paper on family finances and there is certainly some interesting information. These are the key points:
• 12% of 5 – 10 year olds and 37% off 11 – 16 year olds admit to feeling negatively about money.
• While a third of parents (34%) say they’re open with their kids about money, another third
completely avoid broaching the subject of money with their kids, and 11% think family
finances are none of their children’s concern.
• 16% of children claim they’ve learnt about their family’s money situation by hearing their
parents arguing about money when they’re not aware their child is in earshot.
• 22% of children aged 11-16 say they are worried about how much money their family has.
Interestingly with the new National Curriculum comes a new emphasis on personal financial management and financial education will be embedded in the new maths and citizenship curriculum. I think this is a really good thing as it reinforces the importance of it to children.
In our house we spend quite a lot of time talking to the children about money because, like all modern children they find it quite a hard concept to understand and have no idea about the cost of toys or days out. One of the things which we have found works really well is to try to quantify things in terms of the amount of time daddy has to work (so they wont see him). We often find that actually that huge toy isn’t all that important after all. We were also given a superb game which has really helped the children to recognise money and add it up called UK Money Snap as they love to play snap they are keen to play!
In our household we have a chart which balances chores against a sum of money. Its 10p for lading the dishwasher for example, this is the way they earn their pocket money. Its a little bit hit and miss but I think has got them thinking about the value of money and they have certainly stopped demanding expensive comics each time we go to the supermarket, instead carefully looking at the cost of each one and making a considered choice.
Overall, the white paper suggests that being open about money is crucially important, not only for a harmonious household, but also for ensuring that children grow up with a sense of responsibility about their finances. VoucherCodes has eight tips for talking about money:
1. Talk about money at dinner. Money is still seen as a massive taboo. Adding it into daily life, like dropping it into conversation at dinner, makes it seem like less of a big deal. Ask if y our children are learning about money at school, and if so what are they learning? Are these lessons coming from teachers or peers? It ’s easy to then relate what they’re hearing about at school to how things are in the home.
2. Leave your attitude at the door. It’s all too easy to influence kids with off hand comments and
passing statements. Be mindful of what you’re saying about money around your children –
try not to make jokes about the bank manager, avoid discussing other people’s finances in a
negative way and be wary of complaining. Be careful of how you react to money issues too –
especially around opening and checking bills or bank statements.
3. Create an incentive to save. Children love an incentive. Try to encourage their saving by setting
a rate of interest and increasing what they save by that rate. Perhaps you could have two jars –
one for what they’re saving, another for your previously agreed rate of interest, and set a date
when they’re allowed to use to combined funds.
4. Consider opening a bank account. Allowing your child to have access to a bank account
enables them to see the reality of money and know that money they have is theirs. Though
not essential, a bank account with online access can mean y our child can see money going in
and out of their account. Quantify the money in the bank in terms of what they could buy with
what they have, or what they could buy if they save further to teach further lessons on delayed
5. Involve your children in the grocery shopping. Ask them to help you come up with a list of
things they need from the supermarket and things they want. Set a budget, then make grocery
shopping into a game where your youngsters help you find the best value foods from the list for
the things they need, and allow any of the remaining budget for the things they want.
6. Chart Pocket Money. The pocket money chart is another great way to reward your children for saving. Track their progress throughout the month, and encourage them to select a treat (or treats!) they’d like to purchase at the end of the month in the “treat column”.
7. Practice what you preach. It’s integral to set a good example for kids with money, or all of the
messages you’re teaching them about smarter spending, saving and money management will
be completely lost.
8. Don’t stop the conversation. It’s crucial to keep talking about money. Try to make it a regular
conversation between all members of the family and remind your kids that if they ever have
any questions, they can come to you. Leave it as an open ended discussion that can be, and is,
returned to again and again.
If you would like a Reward Chart, do let me know and I’ll email one over!
Disclaimer: My husband went along to a dinner to learn an contribute to this research. I thought it really interesting which is why I have published it!