Teaching children the value of money

All of us with children (our own or nieces, nephews, godchildren) will know the feeling of anxiety about our children and money. How can we raise them to be sensible and generous with their money, and not to be misers? I discussed this earlier in the year when I talked about my children and money and their attitudes towards money. Today I want to reflect on what they actually do with their money, and whether I need to re-direct them in any way.

When I reflect on my children and money, I’m pleased by the fact that they are generous. When they get their pocket money, one third goes into the charity jar to share with ‘poor people’. They love to spoil others for a treat – to pay for a juice for a special friend when we go out, buy me a slab of fudge etc.

They are also wise with their money – another third of the pocket money goes into their piggy bank without question. They have both just had birthdays and received quite a bit of money, and both have very wisely split it in half, opening a bank account with one half and buying Lego with the other half – I guess we all need Lego in our lives!

So what are my concerns about my children and money? Despite being kind, generous and sensible, they still don’t fully appreciate the value of money and appropriate costs. They have no idea what a reasonable price is nor how to value something. What I realise is that they have lovely values around generosity and saving, but are too young to understand what value for money is all about. So as a parent I will need to be quite directive when it comes to my children and spending their money. I need to find ways to help them to understand what is a reasonable price for a while yet. As I said in a previous post, I want to encourage them to reflect on whether something is worth the price that is being asked and if it’s how they want to spend their money. So that guidance continues.

I think that’s OK, because I like their core attitude towards money so far, so we have a good foundation to build on!

Finally, it’s July already, so in my next column I am going to take stock of how am I doing on my financial goals for the year. Am I on track, and do I need to do any course-correction?