finance

From the value of coins to paying for treats: how do I talk to my children about money?


It was when I realised that my three-year-old Feliks was referring to my bank cards as “money” and to coins as “chocolate coins” that it occurred to me that we had a problem. It would seem that I had raised my children with no actual concept of money, and that in his short life Feliks’s main exposure to it had come via the medium of novelty festive confectionery.

It definitely didn’t feel like great parenting, though in my defence I would say that he had barely turned two when the pandemic first hit, an event that more or less caused me to stop carrying cash on me.

I had fewer excuses when it came to his older brother. Aged six, Janek indubitably had a firmer grasp on the purpose of money, insofar as he realised all coins are not delicious seasonal treats. But I’m not sure he grasped how even basic finances worked. And a series of recent wranglings over how much Harry Potter Lego we should buy him (to his mind: lots) had revealed that he seemed to literally not grasp the concept of us not being able to afford things, that it was really only about us having the will to tap the magic piece of plastic (I exaggerate a bit, but not really).

I’m not suggesting this is particularly unusual behaviour for a six-year-old. But there was the worry that I’d not really given him the tools in life to grasp why the £349.99 model of Hogwarts was absolutely not going to happen.

Andrzej Łukowski
Quote: "It would seem that I had raised my children with no actual concept of money"

And part of this was definitely my fault: me and my wife had repeatedly declared that we ought to start giving him pocket money, even solemnly sitting him down a couple of times to tell him we were going to do it. But we never actually did. I think we’d become locked into a cycle of buying him a magazine here, a sticker book there, that giving him money on top felt extraneous. And the clincher was that while we would have given him the pocket money if he’d ever badgered us for it, the fact is he remained resolutely unexcited: what currency he had – a mix of mouldering Christmas cash and the odd acquisition from the tooth fairy – remained firmly tucked away in the recesses of his money box, ignored. Come to think of it, we hadn’t done anything else, either, to teach our kids about money. We definitely needed some tools, resources and advice to help us start.

So I turned to Barclays LifeSkills, a series of online learning tools to teach people of all ages about basic money skills, careers and other important skills.

When Janek is older its simple guides to everything from common banking jargon to how to get your CV looking its best, to how to handle your emotions in the workplace, will doubtless be massively handy.

Andrzej Łukowski’s sons.

For now, though, LifeSkills has broken down the most important things to teach different age groups using helpful free tools. For six- to eight-year-olds (AKA “middle childhood”), when it comes to money, it’s not too complicated: I should be focusing on the value of money, the importance of keeping track of it, choices around spending and saving, and the difference between needs and wants. It’s just simple, clear advice on important life skills, backed up with some easy-to-understand videos and articles. The execution is entirely up to you. But it’s a highly useful resource for parents for establishing what skills will be useful to their children at whatever age they are, and why.

It struck me that the first thing we ought to do was go through Janek’s money box and persuade him that the stuff in there was actually worth something. We added it up: it was a figure that came into the mid-double digits. I talked through what he might be able to buy with it and how he could make a budget. While his initial impulse was to immediately spend everything on whatever happened to be at hand, we ended up discussing what the money could get him and what the best use for it would be. A useful exercise recommended by Barclays LifeSkills to help with this was the needs and wants activity, which suggests creating two lists and placing items in either a “need” or a “want” column.

Andrzej Łukowski’s son.
Quote: "It felt cathartic to clear out the cash but invaluable to make him realise the money he owned actually meant something"

Now, bearing in mind he’s six and it’s his money, I wasn’t going to tell him to shove it in an Isa. But I did explain that a long-planned upcoming trip to the Warner Bros Studio Tour was costing us an arm and a leg as it was, and we would not be splashing out for massively expensive souvenirs. Souvenirs are wants, not needs. However, if he wanted to put his own savings towards something from the shop he was welcome to, but had to understand that it would be a while before he could afford anything else big. Long story short, he spent £32 on a wand. It felt cathartic to clear out the cash but invaluable to make him realise the money he owned actually meant something, and that some things couldn’t be bought by simply repeatedly pleading to parents.

Realistically, although it’s beneficial to start early, my three-year-old doesn’t need to know anything about money, but I think the conversations in a few years’ time will be harder if he thinks coins are food. To this end I bought a big bag of (inedible) plastic coins as an aid. I’m not expecting miracles from him, but we’ve talked through how the things we buy have different values, and as a minimum he has gone from having no concept of money to having some concept of money.

Finally, there’s the pocket money issue. We have started giving Janek pocket money. I can’t say at this point how successful we’ll be at keeping it up. I would be lying if I concluded this by saying he now has a firm grasp of spending, saving, wants and needs. It’s only been a couple of weeks and that isn’t the expectation or the point. But I think he now has an understanding of things like savings and value and we’ll be doing more to learn about budgeting in future. Barclays LifeSkills didn’t tell me that I should be doing something about my kids’ attitude towards money: I knew that already. But it did give me the guidance to start doing something about it. We’re on the right track now, and there’s plenty more advice ahead of us for the years to come.

To find out more about teaching money skills to your family, visit barclayslifeskills.com



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