05 December 2014

Teaching your 8-11 year-old about money

Learning the ins and outs about money is a big part of growing up.

If you’d like to engage your child in more ‘adult’ financial decision-making, rather than counting coins and setting up pretend shops, you may want to start involving them in real life situations.

Nationwide Education has a range of tips, factsheets and interactive games to guide you if you’d like a bit more help.

Take them to the supermarket

Let your kids join you on a trip to the supermarket to see how much you spend on food and everyday household items.

You could even give them some money to spend on certain products, or perhaps something for dinner. But don’t let them go over a set amount – that way they can start to learn the importance of budgeting.

Explain purchases

It’s important your children know why you made specific purchases, so talk them through how you prioritise your shopping list as well as how much you allocate to different things.

If you buy things in bulk, explain how this can sometimes work out cheaper- it’s often worth comparing the cost and size of whatever it is you’re purchasing, e.g: check if for only slightly more money you could get a lot more value.

Talk about long-term goals

Start to talk about long-term saving goals rather than short-term saving goals to get your children thinking about the future – or their future, more specifically.

Explain to them how interest works, particularly with regard to savings. Use specific numbers to give them an idea of how much they could stand to gain by putting money away for a rainy day, such as £100 per year, for example.

Set them targets

Teach your kids how rewarding saving can be by setting them the target of saving for things like a more expensive toy or a day out at a theme park. Then, when they can finally afford these things, it will help demonstrate how they can get what they want by being sensible with their money.

Of course, targets will change over the years. The latest action figure may become a car while a fancy dress could become a deposit for their first house. By starting early, it may stop them relying entirely on the bank of mum and dad in the future!

Introduce debt

Touch upon the concept of debt, explaining that by spending what you can’t afford can result in serious consequences further down the line. The sooner you talk about debt, the more knowledge, skills and experience they’ll have to make informed choices as they grow up. Be gentle in your approach though, so steer well clear of scare tactics.

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