Like a lot of banks, TSB has a bank account aimed at younger people, and if you’ve got kids over the age of 11, it’s a good idea to get them an account like this to prepare them for the big grown up world of banking they’ll eventually enter. Even with the rate of interest on savings as low as it is, it definitely makes sense to teach children how to save money and the value of money generally at any age, and I’m a strong believer in the mantra of “start ’em young”.
There are several things that we do as parents to teach them the value of money and how to save, you might find some of them interesting or even helpful yourself.
- Generally we always make sure that the kids know the value of things. When the boy was desperate to have a particularly expensive LEGO set (Hogworts Castle) we explained to him all the different things that we could have as a family, or he could have that came to the same value. It was disturbing in a way because the set was very expensive but also good to see how he really thought about it. It helped him come to terms with not getting the set because there was no way on earth we were going to spend the couple of hundred pounds necessary to get the set!
- A great way to start, even with really young children, is to use coins to teach them to count. First off you can just use them as tokens, so they’re counting the number of coins rather than the value but as they get older, you can start to let them add up the values. In doing this you can start to talk to even very young children about the concept of money, the value of things and the idea that money requires effort to earn. It doesn’t have to be constant or heavy handed, just the odd subtle comment like “That pile of coins would take me half an hour to earn and would buy you two CBeebies comics” or something like that.
- As our kids have gotten older, we’ve tried to stress that they can either spend their pocket money right away or save it up for a bit and get something much much better. I think we’re getting there but this has been a very gradual process- it’s incredibly hard when you’re 6 or 8 to not spend your birthday or holiday money immediately and instead save it up. We sometimes offer a little bribe to make it more attractive to save but you have to be careful otherwise it becomes expected rather than a special thing.
- Much in the way that I compare the calories in everything I eat against the 119 calories in a packet of tomato Wheat Crunchies, comparing the cost of things is a good habit to get kids in to. For example Fifi knows that a magazine/comic costs roughly twice as much as a bag of sweets and she’s happy with two packets of sweets whereas the boy would much prefer the magazine so he’s more likely to save his money until he has enough. Actually, that’s not strictly true, he’s like to whinge and moan about not having enough for the magazine until we either threaten to bury him in the garden or give up and sub him. He’s no fool.
- As parents we don’t tend to buy stuff on credit (aside from the odd interest free offer which makes sense as we’re effectively delaying payment- we still only do this when we have the actual money to hand) because we’re a bit old fashioned in terms of money in that sense. This is something we’re trying to instil in the kids, so a healthy regard for saving is central to this.
And there you have it; five tips on how to encourage your kids to save money (and a bit of an insight into how we do it). Is there anything you’d do differently?