BILLIONAIRE Warren Buffett believes financial skills should be taught from an early age. “Sometimes parents wait until their kids are in their teens before they start talking about managing money when they could be starting when their kids are in preschool.”
Given Buffett is one of the world’s most successful investors it is probably worth listening to his advice. And with primary schoolchildren around the country counting down until the summer holidays begin, what better time to start?
An easy way to get children thinking about money is to make them aware of its use in day-to-day life. So much spending is done by card now that children don’t necessarily see notes and coins handed over regularly. If you bring young children shopping, point out the price of things as you add them to the trolley, explaining why you are choosing one size and brand over another. You can make a game of it by asking them to help you find the cheapest item and also talk to them about quality, taste etc if you choose a more expensive brand.
Older children can be set challenges around the grocery shop. Give them a set shopping list for the week and a budget to see if they can find value and buy the list for less than the set amount. You can sweeten the deal by allowing them to keep any savings. An alternative challenge allows them to use their online savvy. All the supermarkets produce weekly offers, so set young people the task of comparing deals and seeing which retailer will give the best value for the family shop this week. This has a double advantage of encouraging them not to be brand conscious.
The simplest way to get your children used to managing finances is to give them regular pocket money. You can then explain their options, to spend the money on sweets and treats or save it. Younger children will struggle to save without a clear and attainable goal so guide them to come up with something that can be achieved after a couple of weeks of saving. For extra encouragement, help them draw a thermometer-style counter they can colour in as they get closer to their goal. They can learn to save some and spend the rest, maybe using different containers to separate their money.
Older children can think longer term and have a bigger goal in mind. You might consider adding an incentive, either by matching what they save or, if that is too much, agreeing a bonus you will give them if they hit their saving target in a set time.
Pocket money can be based on age or as reward for carrying out jobs around the house. Children should not be rewarded for doing basic age-appropriate tasks like cleaning their rooms or washing up, as they also need to learn that housework is part of life.
But giving them the chance to earn extra by doing extra tasks will boost savings and help them value the money they earn.
The summer holidays are a good time to talk about finances as families will usually spend more on days out and holidays in the next few months. Give your kids an idea of the entertainment budget and allow them a say on days out. If they learn that the price of an afternoon at the cinema with popcorn and fast food is equal to several trips to the beach/park with a picnic, they can choose which they will enjoy more.
It is unrealistic to involve them in decisions about family holidays but you can give them control over any spending money you have allotted for them. If you think a child will spread it out judiciously, give them their money for the holiday to manage themselves. It could be a long week or more if a more impulsive youngster blows the lot on the first day. If you know they will struggle with temptation give them budget for a day or two at a time.
The important thing is to follow through on what is agreed, doling out extra fivers on request will defeat the purpose completely. We know there is no endless of supply of money available and it is our job to make sure children learn this well before they reach adulthood.
DEAL OF THE WEEK
Festival-goers preparing for summer weekends of music and, hopefully, sunshine, should consider a trip to Halfords.
The store currently has a huge range of camping equipment reduced, with some items at half-price. Campers can get a basic two-man Dome tent for as little as €18, while bigger groups can pitch up in the 6-man Family Tunnel Tent for €120.
There are a large range of accessories available, including foldaway canvas chairs for €9, or two for €15. There are also kids chairs available for family campers. There are different styles of camp beds, sleeping bags and air beds available, and a foot pump for €6 to take the hard work out of inflatable items. They also have cookware and utensils reduced, including a 15-litre collapsible water carrier for €8.
You can browse the range at Halfords.ie. Their Click & Collect service allows you to reserve items online and pay and collect from your nearest store.