When it comes to money, nothing focuses the mind like being made redundant – especially when you’re a parent, with all the financial anxieties that brings.
The monthly paydrop of filthy lucre no longer arrives in your bank account and you suddenly realise that, from now on, luxuries are a thing of the past and every penny counts. That’s how it was for me when I lost my job 18 months ago. I became the primary carer to our three children, now 10, seven and four, while my wife became the winner of bread.
My redundancy package was enough to last me a couple of months, but with some careful cutbacks and budgeting, I found I could eke it out to perhaps six. After 30 years of taking a regular salary for granted, I suddenly realised the true value of money – and I was determined to make sure my children did the same.
I have never been in debt and now that I know I can’t be my children’s financial cushion should they get into trouble in the future, I’m going to try my damnedest to ensure they never get into unnecessary debt, either. But it’s not only parents like me, who have fallen on hard times, that need to develop strategies to make their kids money-savvy.
The cost of living continues to soar, the jobs market continues to shrink. And then there are some necessary evils ahead for our children, such as university fees. It is such an issue for society, that in December, MPs put forward plans for children as young as five to be taught about personal finance in schools, including lessons about credit card interest rates and mobile phone contracts. The group of 226 MPs and peers warned that unless the lessons were introduced, British youngsters faced being plunged into debt within months of leaving school.
This initiative makes perfect sense to me, but while we’re waiting for it to be implemented, what can we parents do to raise our children’s awareness of money issues? Over the last few months, I have developed a number of strategies to make my kids money-savvy. And so far, they seem to be doing the trick. Let’s just say we haven’t had the bailiffs round. Yet.
1. LEAD BY EXAMPLE
Good money habits start in childhood and if your children see you saving and being price-conscious, they will, too. A recent survey by HSBC bank found most people who described themselves as 'active savers' started young, with 73 per cent saying it was their parents who taught them the value of saving money.
2. TAKE THEM SHOPPINGThis is a very effective way of making maths mean something to children. For example: ‘If a packet or Rolo biscuits costs £1, how much does each of these six biscuits cost?’ Answer: 16.7p. The downside is you’ll come out with far more biscuits than you went in for!
3. CHORES FOR REWARDSNot all chores should be financially rewarded, otherwise it can lead to a sense of entitlement. However, when a job is done to a standard beyond expectations, it should be acknowledged with a coin or two. I have a pricing scale for my children’s chores, starting with 10p for a cup of tea while I watch telly as they vacuum the living room!
4. WASTE NOT, WANT NOT
Food is expensive and there simply isn’t room for fussy eaters in these lean times. Therefore, I do as much cooking with leftovers as possible and the kids always eat it second time round. It’s not quite in the same league as my own Dad, who would make us eat leftover liver and cabbage – for the next day’s breakfast! The Government’s Love Food, Hate Waste website has some great recipes to inspire you.
5. JUNIOR APPRENTICES
We have spent several years accumulating lots of pink and blue plastic, loosely defined as ‘toys’. ‘Loosely’ because they get played with once and then forgotten. But now, led by my daughter, these toys have been rescued and recycled, either by being sold at school fetes to raise funds, or on our doorstep, to raise money to buy even more pink and blue plastic. Mum and finance expert Sue Hayward said: "If they've got unwanted toys or clothes that they could sell on Ebay you can even help them learn about those fun ways of making money of their own."
6. THE MONEY GAME
There are lots of websites that combine maths with money and fun. My kids’ school uses a programme called Mathletics, but there others if your school doesn’t provide one. My kids like ChildrensMoneyWorld.com.
7. I’LL BE BANK!
We got my middle son a Plastoy Robot Money Box for Christmas . Deposit a coin, and it thanks you. It keeps a running total on a digital display and if you make a withdrawal, it tells you how much you’ve got left. Since he got it, my son has been down the back of every chair looking for loose change to deposit.
8. REALITY CHECK
Every so often, when the kids are nagging us for the latest Wii game, or an extra Skylander for their collection, I take them to Toys R Us and given them a fiver each to go and spend as they please. Then I wait by the door for a few minutes until they return, crestfallen. ‘But everything’s too expensive,’ they complain. ‘Precisely,’ I reply. And then we get back in the car and crack on with some chores so they can earn enough for another trip. It sounds mean and extreme, but it keeps their feet – and their sense of entitlement - on the ground.
9. SAVINGS ACCOUNTSWe have accounts set up for each of our children. Every so often, their mother or relatives or I will make a deposit and then we show our kids how much they’ve got in their pot – and that it will be all theirs when they’re 18! Gocompare has an easy to understand guide to savings accounts right here.
10) A WORD OF CAUTION...
Never let your children help you work out odds on spread betting websites. As well as it being immoral and wrong, they are also rubbish at it.