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How do you teach children the value of money?

My boys are six and seven and it has always been important to us as parents that we help teach then the value of money, but this isn't always easy.

Initially we had a reward system for chores and good behaviour when they were small.  Where the boys got points to spend in mummy's shop.  I wanted to reinforce good behavior and reward them. This encouraged the boys to use their maths skills and we found that they really loved tat!



The shop worked well until the last year and we decided the time had come to give them pocket money.  They both get £2 per week with the ability to earn more for additional work and chores.  There are a number of things that as a family we believe you should do for the good of the family without being paid such as setting the table, clearing the table, tidying up, but then there are also things that we want the boys to do that are above and beyond this.

For example Maxi has become something of a reluctant reader this last six months, so we agreed that we would pay him 2p a page to a max of 10 pages a night in additional pocket money.  Is this blackmail?  We do not see it as such, we see it as encouraging a work ethic!



To encourage saving we bought both the boys a funky purse to keep their money in and we try to encourage them to save for something rather than just spend it all, but as this is their pocket money the choice is theirs.

Learning about value:

Over the summer both boys realised that it was cheaper and better value for me to go to the supermarket and buy a box of lollies then buy one from the ice cream van.  They would pay me and I would use their money to buy more ice cream and lollies.

Mini also realised that it was better for him to ask for a magazine subscription for his birthday rather than pay out monthly for the publication he wanted and we discussed that Mummy and Daddy would buy a subscription for them and they could pay us back.

They also have learned that they can club together to buy a larger item and share it.  They also have learned that they can trade-in any old video games that they are no longer playing with and upgrade for much less.

We do not offer a credit service, but have been know to give them a little extra when we see that they have both been saving hard for something and if they get money from their Nanna and Grandad then they give it to us to put away for them.

Both the boys are currently saving up to buy me and MadDad a christmas present with their own money and we have said we will match what they manage to save.

Set expectations:

We also make sure we set expectations is we are going anywhere.  We take a picnic or a flask and explain that we do not have the pennies to do certain things and that moaning or whining won't magically make the money available.

Both boys understand that if we go to a car boot sale and sell some of their old toys that the money goes to buy  new ones.

Give responsibility:

We give age appropriate responsibility to them.  If we are going to a museum or on a day trip then we say they can have a set amount to spend in the shop.  We understand that they are children and that they wants and needs are very different to mine and as much as I sometimes want to step in, I try to let them make their own decisions and mistakes.

We also explain how much it costs to do the extra activities that they do each week, such as Beavers and Junior Football.  We feel it is important that they understand that these things are not free and that they learn to value them an d it also makes sure that they attend.

This is an entry in to the MoneySupermarket SuperKid Savers competition.

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