This is a guest post from my friend Kati, who blogs at Wedding Crafts.
My little one is nearly 8 years old. When she first started school aged 4, I thought it was time to teach her how to use money responsibly.
4 years old seems early, you may think. However, she’d get to know the numbers and shapes on the coins, learn that some buy more than others, and, with help, learn to add them up.
We started off with 50p a week. At first, the money was pretty much ignored, or used to buy small sweets. I was very involved in the decision-making at first, advising on whether or not she would be able to afford something, suggesting alternatives if she automatically went for the same choice every time, gently reminding her that if she saved, she would be able to afford bigger and better things.
She started year 1 and her pocket money went up to £1 a week, then in year 2 to £2. However, no matter how much I tried to teach her, explained and discussed, she would not understand or follow the concept of saving. Every pound she got would have to be spent almost immediately, and on cheap plastic tat at that. At the same time, we noticed that she still did not treat her things with the care we would have liked her to. Her room was a mess, full of little, discarded items, and tidying, too, was one of those chores that never lasted.
Desperate times etc. We changed the regime. From now on, we decided, she would have to earn her money. I made a list of all the chores I expected her to do routinely, and some for little bonuses. The list included things like keeping her desk and floor tidy, emptying her bin, dusting and vacuuming her room, as well as combing her dolls’ hair and helping wash (drown) my partner’s car. Prices ranged from 5p for small routine tasks to 20p for the most challenging ones.
We would tally up the chores done and she could add up the weekly total. As predicted, the first week she exceeded her target of £2 and earned close to £3. This lasted for about 3 weeks, then, suddenly, she chose not to do her chores, having got used to the money she received. She was crushed to find that she hardly earned any money that week. Now, we go through cycles of lots of chores and fewer ones done. It all averages at about £2, and, of course, the type of chores and payments will change as she gets older.
What also helped was that we decided to take her window-shopping more. Her Frozen obsession proved useful, as she’d want to buy all sorts of accessories and would have to start saving up for the added Disney badge.
Now, saving up actually was another huge challenge, which threatened to mess up the whole project. One of the first big things the little one decided to save up for was a Frozen tiara at £6. She saw it in the shop on a Friday afternoon, and by Monday had enough money to buy the item. So, we went back into the shop, only to discover that they had stopped selling the thing. What a disappointment! You get your child to save, teaching them the value of money, and find that it is becoming more and more difficult to spend some time deliberating whether that really is what they want. They may be little things now, but we, too, have found that taking the time to save up sufficient funds for something bigger has, on occasion, resulted in us losing out.
Debt is not an option, however, and so we are now finding us trying to balance the value of saving with the need to satisfy the urge to have what she desires. Not an easy feat, but one of many of life’s complications she will have to learn to understand.
How do you teach your children about being responsible with money?