Kerching! Getting It Right When Teaching Your Kids Financial Responsibility

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One of the most important things you can teach your kids is financial responsibility. If you inform them of the basics, then you can be safe in the knowledge that they won’t squander everything they have once they move out. Teaching them this important life lesson at an early age will also get them into some good habits, such as saving and budgeting.

But how exactly do you teach your kids financial responsibility? Most of it comes from experience. However, these are some of the things that you can try and instil in them from an early age.

Reward Hard Work

It is important for children to know that the harder they work, the more they can earn. So next time your children spend a couple of hours doing some chores, consider increasing their pocket money accordingly. However, you shouldn’t pay them for all the chores you do. This can help to teach them that some tasks are just part of growing up. The tasks that go above and beyond should be rewarded. And you should remind them that if they go above and beyond in their career, they will reap the benefits.

Encourage Them To Save

Encouraging your kids to save their money from an early age can help them get into good habits for the future. If you do give them weekly pocket money, remind them that it is important not to save it all at once. If they save it in their bank, they can save up for something that they have always wanted. When they are saving, you should also let them know that buying things

this way is a lot safer than taking out unsecured loans. Make sure that older children know that second charge loans are the safer option if they ever run out of savings.

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Get Them Involved With Budgeting

Whenever you sit down to do your monthly or weekly budget, try and get your children to join you. They can then see just how much work goes into planning the family’s money. Give them a chance to make their own suggestions of how you should spend the money. It is also a good idea to take them with you to the supermarket so they can see the money in action. Tell them about coupons and comparing brand prices can help them to save a whole load of money!

Let Them Make Mistakes

At first, your kids might make some mistakes with their own money. They could overspend their pocket money and might end up annoyed when they have none left! You should leave them to make these mistakes and not bail them out. Otherwise, they will never learn the importance of being sensible with their money. After making the same mistakes a few times, they will certainly learn from their mistakes!

You might be wary about leaving your children in charge of their own pocket money at first. But it will certainly pay off, and they will end up being extremely responsible with their finances!

Gender pay gap starts early with pocket money

The Financial Fairy Tales Piggy Bank imageThe economic downturn has hit many wallets – but it has also hit children’s piggy
banks, according to a report from Tesco Bank. The UK’s pocket money budget
currently stands at around £40 million per week*, despite the fact that one in
four parents (24%) has reduced the amount of pocket money they give to their
children following the recession.

The report, entitled “Every Little Helpers” and the first in the Tesco Bank “Family
Matters” series, reveals that the majority of parents (71%) across the UK
expect help around the house from their children (aged 4-15 years old) in
return for pocket money. The most generous parents can be found in London,
giving children £7.81 per week in return for household chores, whilst the UK
average is £5.80.

Today’s mums and dads expect children to complete chores ranging from tidying their own
rooms to mowing the lawn in return for cash.

Top five pocket money earners

London                               £7.81

Swansea                              £6.68

Glasgow                              £6.46

Liverpool                            £6.38

Wolverhampton                £6.26

Bottom five pocket money earners

Wrexham                           £2.50

Chelmsford                        £3.40

Worcester                           £3.50

Leeds                                   £4.29

Bristol                                 £4.33

 Gender pay gap starts at an early age

The report also suggests that gender differences start early on in life. Boys are
more than twice as likely as girls to receive between £16 and £20 a week but
they are also more likely to spend their money within days. While girls are
streets ahead when it comes to saving, over a third of all children (38%)
regularly save-up their hard earned cash for something they really want.

Dr Elizabeth Kilbey, a leading child psychologist working closely with Tesco Bank
on the research, says: “It’s great to see so many parents across the country
rewarding and reinforcing children’s good behaviour with pocket money they can
then choose to spend or save. You can never start financial education early
enough in a child’s life and this approach is by far the best way to teach
children good habits.”

The majority of parents surveyed (65%) said they have had the financial equivalent
of the birds and bees conversation with their children; where money comes from
and what it’s for. “Financial knowledge is best learnt from a young age. While
parents can make it fun, money is not a joke and children should understand
this clearly. Parents work hard to provide things for the children. It’s
brilliant to see parents across the UK talking to their children about this,”
Dr Elizabeth Kilbey added.

 Parents helping kids onto savings ladder

Parents are actively helping their children onto the savings ladder and 35% of children
under 16 now hold their own savings account. However, over half (54%) of the
children in the UK are traditionalists, preferring to keep their coins and notes stashed safely away in a piggy bank.

Tesco Bank’s “Every Little Helpers” report explores children’s spending and saving
habits and how they can be taught the value of money through something as simple
as regular pocket money.

David McCreadie, Banking Commercial Director at Tesco Bank, said: “We commissioned
this research to understand the changing dynamics of family spending and this
report has provided us with interesting findings. It’s great to see parents
talking to children about money and teaching them savings habits at an early
age through pocket money.”

The report is available now for parents to download free at https://mediacentre.metafaq.com/help/news/everylittlehelpers/.

Kids allowance – to give or not to give?

Kids Allowances

People seem to ask the same questions about kids allowances again and again.

“Should I give my child an allowance?”

“How much should I give my child as an allowance?”

“When should I start giving my child an allowance?”

“Will an allowance ruin my child’s entrepreneurial spirit?”

Allowances are a very touchy subject and it really comes down to each individual’s personal strategies for financial education for their child.
Teaching children about money can be very difficult and confusing for the parent as well.

Most of us were raised with the value that “money is evil”, or “you don’t need to have money to be happy.”

But have you had a good look around you lately? Can you find me a family who are in a lot of bad debt that are not stressing about their finances? Maybe money doesn’t make you happy but not having money will make you a lot more unhappy, I can tell you that for sure.

Just imagine, you have a recurring income of more than $10,000/month.
How would that feel? Would you feel stressfree because you are now able to pay off all of
your expenses and thereby not create any bad debt?
How will you feel when you have money left over at the end of every month instead of living paycheck to paycheck?

What if you were financially able to give away 10% of your income, every month, without even noticing the fiancial impact?
What would you give it to? Who would you like to help? How would it feel to be able to help others in need with the extra money that you are earning without even feeling the financial impact?
It would be a pretty awesome feeling right?

So how does this tie into the topic of allowances?

Some people suggest that Allowances are a way to teach their children about money.
Others suggest that allowances gives their kids the chance to learn to handle money without losing their shirt.

Here are some of my own suggestions on the topic to get your financial juices flowing.

Maybe when we give our child an allowance it might start to create the feeling of entitlement in our child?

What if by giving our child an allowance we were actually hindering their financially creative minds?

Would they be so used to just getting money that they wouldn’t even bother to come up with creative new ways to earn their own money?

And what about pride of ownership that comes when we are finally able to acquire our dreams by our own means instead of just as a gift from someone else?

These are just a few of the topics discussed in Allowance Secrets and for a limited time you can get it for free.

Allowance Secrets is the ultimate Guide to allowances. Over 20 experts have
contributed to this project.

Like to learn more about the subject? Click here