Money Skills for Kids
We recently decided it was time for our 3 young boys to learn the value of money and the importance of managing it. This was motivated by a need for them to understand how money is earned but also to start giving them small responsibilities in our home and life skills for the future.
We work so hard to ensure our children develop good manners, confidence, empathy along with many other important personal traits. Earning pocket money and taking care of it can teach a child to become independent and to make decisions for themselves.
A few ways to get them started…
- An opportunity to earn pocket money
Decide on a list of chores they can complete depending on their age. Pick a day and time to complete the weekly chores but also include some simple daily tasks to be completed e.g. Clearing the table after eating, emptying/filling dishwasher or washing dishes, putting rubbish into the bins. Agree on how much pocket money they can earn and a day that they will receive it each week.
2. Set a budget… save vs spend
This will help them to understand the rewards of saving and being able to budget perhaps for something they would really like to buy in the future. Decide where they will store their pocket money and set out some goals using two separate pots.
- Spending Pot: Perhaps they would like to spend a fraction of their pocket money each week on something small, so help them to decide on an amount for this pot.
- Savings Pot: They may decide to save for something they would like to buy at some stage in the future or to maybe have spending money for holidays or a day out. If they have a goal amount, see if they can work out how much and how long they may need to save to get to that goal.
3. Open a savings account
A savings account can be ideal for older children. It can help familiarise them with different financial terms used such as deposits, withdrawals, interest. It also brings a satisfaction if they can see their savings figure increase each week. Another option is to set up a Revolut junior account where you can transfer pocket money to their online account, and they can use a prepaid card. This would be handy now with the preference of contactless payments. They can also use the junior app to view their account balance, while parents have full control of the account.
Wishing good health and a very Merry Christmas to all readers of the Meath Coaster from Carol and Oran in Drumgoole Financial Services.