Included amongst the many different life skills that we need to teach our children, is the skill to deal with money. It is important for children to understand the value of money and appreciate the role it plays in our lives and in the life of society. There are many useful information and guidelines available to parents, such as a series of educational papers by Sharon M. Danes and Tammy Dunrud on Teaching Children Money Skills.

Not only children, but too many youth and teens have no understanding of the value of money, or how to save and spend money wisely.

Every family has its own “culture of money”, how they deal with money, how they value it and what priorities they set when it comes to spending money. As such, in a family, husband and wife will also have different appreciation of money as learned in their own families. What is important however, is that couples must consult and agree on shared values about the financial education of their children. They need to be in agreement whether they are going to make payment of regular pocket money (allowance) to their children and the amount and the method they will use. Parent must make sure that their children understand that even adults cannot always afford everything they wish to buy, and that they may not always purchase what they can afford.

While teaching children about the value of money, parents should be careful not to forget the importance of generosity and helpfulness. While it is good for children to have jobs that earn them some money, they should still appreciate the importance of doing chores around the house and at school in a spirit of service to help as a member of the family or school community.

Parents may wish to pay their children some money on a regular or an irregular basis. Both possibilities are quite in order, as long as parents discuss this with their children. For example, one family may wish to give a weekly allowance, while another family may pay the child only on occasions or based on certain achievements or chores. It is also quite in order to change the methods if the family’s financial situation changes. Children can and should develop a good understanding of the family’s financial situation. The best is to have a short family consultation, share the situation with the children and have every one give their suggestions which will be considered by the parents who will make the final decision. In sharing the financial situation of the family, the parents of course do not share sensitive details, but rather general information sufficient to provide the child with a clear understanding. In the present recession of the financial market it is likely that some parents may loose their jobs. It is better to arrange a family meeting and share this with the children and together consult on some “saving-measures”. Often, children come up with very useful suggestions. They may decide to make Christmas gifts and cards at home, for instance, instead of buying them from the store.

In teaching children the concept of money, parents may focus on certain aspects such as the role of money, earning money, spending money, sharing money, saving money and borrowing money. Some of these concepts such as the saving and borrowing are more complex and should be taught a little later at mid-elementary school years, but all the other aspects can be taught as soon as the child can carry out sensible conversations. Since children don’t work, parents can create opportunities for their children to earn money, either in form of regular pocket money, rewards, or occasional payments. Children should be able to spend part of their money while parents will guide them in setting priorities. It is important that sharing money is also taught and emphasized so that children grow to be conscious of their responsibility towards society and be willing to share part of their money with those who are less fortunate.

When children make money, it is useful to help them make an overview of their income and expenses, no matter how simple. It is important for them to see the relationship between their earning and their spending and to understand that their spending should not be larger than their income.

Older children may receive jobs outside of the home such as helping with the neighbor’s garden, baby sitting for a family members and similar jobs. They may need their parents’ support. For example they may need a ride to get to the job. Parents should discuss this with their children and let them know how much support they can offer them. The time for such jobs should be taken from the children’s leisure and fun time and not from the time of study, sleep or chores.

Teaching children about money is not only about preparing them for entering the business life, it is a vital life skill and we should not ignore this responsibility to teach them as early as possible. 

If you need further assistance or information on this topic, you may contact the author at forel(at)forel.sk . This article was submitted by Mrs. Zarin Buckingham the director of Forel International School with branches in Bratislava and Trnava. www.forel.sk

Ilustračné foto: Zue