Teaching Our Children Money Management

One thing I wish that my school taught me would have been money management. I don’t really understand why schools don’t teach this as it is so essential and useful for everyday life.

They say school is supposed to help you learn and prepare you for the real world but does it really?

As many schools do I was taught the compulsory sciences; biology, chemistry and physics. But are these essential to everyday life? I imagine for most people, like me, they’re not. Unless of course you are looking for a career in the sciences.

Most of what I learnt in school actually cannot be applied to everyday life, why is this? Why are schools teaching our children non-essential subjects?

Wouldn’t it be great if they spent more time on the real issues? Politics, relationships, money management etc?

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Growing up I was never great with money, I wasn’t really taught how to manage my money. My parents engrained it into me to never get a credit card but I didn’t really understand why. I mean how hard can managing a credit card be? You buy something then you pay it back when you can. Obviously it is not this easy, as when handed a credit card with a large limit I imagine a lot of people are tempted to go out and spoil themselves and buy things they don’t necessarily need. Not to mention there's also the added interest to pay back too.

I got my first credit card when I was in my twenties and I can’t for the life of me remember what I bought. Now I am in my thirties and yes we do have debts that are now manageable, but we did struggle for a long time to make them manageable. Now I always think before I buy, I think how many hours would I have to work in order to be able to afford the item I was looking at.

I have been looking online for resources which I can share and use with my children when they are a bit older on managing money. There isn’t really a great deal of information available. I have found the Money Saving Expert to be the best resource and I love the forum. I have asked many a question there and had amazing support for their members. The most useful information I have found has been from the Dave Ramsey website where he talks about starting young, doing chore charts etc, as well at the young money website - my money week.

I have never thought about starting to teach my children money management as they’re 4&5 years old at the moment, but like most kids I imagine when we do go out they do nag to buy things and when I tell them no they don’t understand my reasoning so maybe it is time I started to teach them the basics. I quite liked an idea that I first saw pop up on Facebook, and apologies I cannot remember the source of this, but it was a parent who had  put various amounts of money into money bags and pinned them to a noticeboard next to a chore. If they wanted to have the money in the bags they would have to do the associated chore, and the more difficult the chore or the chore that took longer would earn them more money; for example 50p for making the bed, £2 for doing the dishes.

A lot of people have said about starting them off with a bank account, but in my opinion I think I would rather them handle the money and that way they can see their money going down when they have spent it and then their money increasing when they save it.

I asked a number of bloggers for their opinions on this;

Jennifer from Mighty Mama Bear says “I think it should be taught in schools. It's such an important lesson. We give the boys (6 and 9 years old) pocket money on a Friday if they have completed all their daily jobs that week. Not massive jobs but things like making their beds each morning, keeping their rooms tidy, doing their homework etc. We found they would constantly ask for things when we were shopping so I'll ask "are you paying for it with your pocket money" and if they don't want to spend the money they have, they obviously don't want it that much! It's teaching them the value of money, and working for it. I'm also trying to encourage them to save some of it so they can buy something bigger they may want, rather than frittering it away on sweets and cheap toys”

Pete from Household Monsey Saving says “It should be taught in schools and from an early age. My children are given pocket money each week. We talk about what they want to buy and how much it costs. This gives them the idea that if they want something expensive, they need to save. They can also work out how long it will take to save for. They also have a savings account which they put money into and think it’s great that they get money back from interest.”

Becka from Mummy Est2014 says “J is 3 and I already talk about money with him. I explain about not having enough money to buy toys everyday else we couldn’t buy food. We look at the money he has when we go car boot sales so he can see he has a certain amount and when it’s gone, it’s gone. I think it’s important for children to respect that money isn’t infinite. More real life money skills need to be brought into upper school I think. It would certainly have been more beneficial to learn about tax and budgeting than most of the rubbish I learnt in sixth form.”

Mandi from Big Family Organised Chaos says “All the children get pocket money and they are all interested in the best deals they can get with it, we discuss how parent s have to get mortgages to buy houses and that kind of thing, it’s clearly worked as my eldest is in university and she is the best budgeted person I know and has lots of money left at the end of the year, whereas lots of her flatmates are broke!”

Han-Son from Daddi Life says “Involving them in the processes and places with money (e.g. in the shop, counting coins in other transactions), getting them seeing and helping is a good first step.”
Do you currently teach your children about money management? What method are you using? Do you think this is something that should be taught in schools? I'd love to hear your thoughts.