Money Talks: Time to talk about the piggy bank and saving to your kids 

Start as early as possible by showing the kids where money comes from, how to spend wisely and be able to differentiate between needs and wants and how to set savings goals.

Piggy Bank Stuffed with Euros --- Image by © Roy Botterell/CORBIS

We all know that money doesn’t grow on trees, but what exactly are we teaching our children about how to manage it? 

Teaching them to be smart with money gives them a valuable and vital life skill. As a parent, you have the power to shape your child's relationship with money.

Start as early as possible by showing them where money comes from, how to budget, how to spend wisely and be able to differentiate between needs and wants and how to set savings goals.

Here are some of my Top Tips:

Talk out Loud 

You do not need to be an expert to teach children about money. Your children will naturally ask you for the things that they want. It is always hard to say no. Talk about how we all have limited money and that we need to carefully decide what we spend it on.

How you earn money 

It is important to talk to them about how you earn the money you have to spend. They need to understand that you get a certain amount of money each time you get paid and that this needs to cover the essentials like food, clothes, and mortgage payments etc. Explain about how you choose what are the most important things to spend your money on.

Needs versus Wants 

Discuss the difference between 'needs' and 'wants’ and encourage your children to think about these before spending their money. When older children get their first job, they are often tempted to spend all their money at once.

Tap and Pay 

Explain that when you tap your card, it talks to your bank who has your money in your bank account. When you tap to pay it uses money that you have made by working and saving.

Shopping 

While shopping, teach your children how much things cost and how similar items can have different prices. You can also show them how to compare deals and work out which items are better value and how to identify price differences and discounts.

Plan an Event 

Involve your children in planning and budgeting for an outing or a birthday party. Work through all the costs with them, including transport, food, or tickets.

Set a Budget 

Set a family budget with your children. Explain how much money you have each week or month and how this is spent. They will then start to get a sense of the cost of living and how long it takes to save.

Pocket Money 

Pocket money can help children to understand the value of money. You can choose to pay them for certain tasks, for example mowing the lawn, hoovering the house, or washing the car. Make sure you withhold or reduce their pocket money tasks are not carried out properly. This will teach them that they only get paid when work has been done to a certain standard.

Encourage Savings 

Learning to save is a vital money lesson. Piggy banks are great for younger children. They can see the money they’re putting away and watch it grow as they save. Opening a savings account in a bank or credit union is a good way to introduce them to banking, saving and interest.

Sharing their Money 

Encourage your children to donate some of their savings to charity. Get them to pick out a charity of their choice. Animal charities are very popular with younger children, and this teaches them that money can be used to help people and is not just for buying things.

Many of us learned our financial lessons far too long after we left the family “nest”. 

Teaching your children early to spend within their means and plan ahead is the foundation to effective money management and they will certainly thank you in the years to come.