Teaching your children about money

The Hubby and I have recently realised that we needed to change the way we teach our children about money. So far we’ve tried to pay them for small jobs, 10p here, £5 there, but it didn't really teach them much, they just expected to get paid any time they did anything. Then we tried not paying them for anything and buying sweets for them without any mention about the money. This obviously didn’t work either. So how do you teach your children about money?

Why do you need to teach your children about money?

Okay, if you’re really asking this question I’m kind of worried. Children need to learn about money, they need to learn what money is worth. They will have to learn what 10p will buy them just as much as what £20 will buy them. It is a part of growing up and if they don’t learn they will end up in deep deep trouble when they’re adults. It is YOUR responsibility as their parent to teach them.

Education must not simply teach work - it must teach Life.

W. E. B. Du Bois

Our boys, LP and BP, know we’re pretty well off. We don’t worry about paying bills or buying groceries. But we also don’t go buying new cars every year or buying a fancy handbag (hello Louis Vuitton!) every two minutes. We have money, but we aren’t frivolous.

Our boys also know that we work hard to earn our money, it is easy for us to show them how hard we work because we work at home. Or at least I think it’s easy. Maybe us working at home is teaching them something completely different, like how they can be at home and “do nothing” and everything is still okay. I don’t know. But I do hope that we’re upfront enough with our children that they learn.

Talk to them

Ever since BP was old enough to understand we have discussed money with him. We tell both our boys how much things cost, we talk to them about tax, and we talk about the bigger purchases too. We’ve discussed economics, devaluation, so much I can’t think of it all. We also talk about how to earn money and the kinds of jobs you can have when you’re an adult. I believe the more open you are with your children the more they will learn.

Two boys sit on rocks on the top of a huge hill looking over fields of green stretching into the distance. The younger boy, closest to the camera, wears a red t shirt, the older boy further from the camera,  wears a grey t shirt. A brick wall separates the boys from the fields.

Give them opportunities to earn money

Namely chores. This is one of the biggest things I stand by. My children have chores and have had for a very long time. At first they weren’t paid for their chores, it was just what they have to do.

We would pay our children for the extra jobs they did, like helping with the gardening. We have a “cleaning day” every month too and they would get paid for that.

We soon found that our children didn’t really get much opportunity to earn money.

BP has wanted a new phone for a while, his old iPhone 5 was far too old - the screen was starting to pop off! With the iPhone X almost upon us we told BP that he could “buy” his dad’s old phone (iPhone 6S) when the Hubby got the iPhone X. That was a few months ago, we gave BP plenty of time to save up for it, but those few months have taught us that we don’t give them enough opportunity to earn money.

That is why we have changed the rules.

Establish rules

Like I said the Hubby and I have changed our rules again. We’ve been talking about it for a while and BP not earning enough was the breaking point. We couldn’t keep them from earning money but we didn’t want them to get “pocket money” and not earn it.

It was a difficult thing to do but we came up with the rules.

From now on our boys earn £5 per week, they have chores to do every day and as long as they are done they will get the £5 at the end of the week. Of course without checking that the chores are done this rule would never work, so I have to check. Instead of checking every day, adding to my giant to-do list, we told the boys that I would check randomly. They will never know when I’m going to check, which means they have to do the chores just in case I check.

Rules are important and they teach your children to show up. Just like they’ll have to when they have a job. If you continuously go to a job and don't do your work you are fired. If you take days off because you “can’t be bothered” you get fired. By giving our boys rules to follow we’re making sure they learn about showing up every day.

Don’t go back on a promise

Another part of our rules is that if we go out for a whole day and they don’t get a chance to do their chores that is not their fault. We couldn’t not give them their money because we took away their opportunity. That wouldn’t be fair.

If you make rules, stick by them. If you make a promise, don’t go back on it.

Be strict. Both with yourself AND your children.

A mother's hand holds onto her baby's hand. The baby is wearing a white sleeping outfit.

Give them opportunities to spend

Up until now we have bought everything for our boys, if they wanted sweets we would buy them, if they wanted toys they would get them for birthdays or Christmas. They never really got the chance to spend their money, even if they earned any.

We told the boys that we are stopping that. If they want sweets they have to buy them with their own money. If they want toys, aside from birthdays and Christmas, they will have to save up if they want it soon.

Tell me and I forget. Teach me and I remember. Involve me and I learn.

Benjamin Franklin

Again, this makes me think of BP who has just said he wants an Apple Watch. He has absolutely no need for one, but we have said that if he wants to save up for one then he can have one. That dedication deserves reward.

Let them be free

When you give your children money you can’t really put restrictions on how they spend it, unless the thing they’re choosing is completely inappropriate. If they want to spend their money on something you have to let them, even if you think it’s a waste of money.

If you don’t let them spend the money what is the point in teaching them to earn in the first place?

They need to learn lessons about the things they buy and the only way they can do that is by making mistakes. So if they want to buy that silly card collection you have to let them, even though you know they will never play with them.

Two teen boys stand side by side chatting.

It’s not easy

Teaching your children about money is certainly not easy, and to be honest I think we’re still learning ourselves. Our boys are 8 and 13 years old and we’ve changed the rules lots of times. We haven’t found the sweet spot yet, but I’m hoping we’ve found it this time.

Being honest with your children, setting rules and sticking by them, and giving them the freedom to spend their money is the best you can do as their parents.

If your children are about to head off to college/university check out these great tips for budgeting over on OneClass - and there's a free download for you there too! 

Have you had to start paying “pocket money” yet?