Ask the Expert: How do I teach my child the value of money?

Q: WHAT’S the best way to teach my eight-year-old about the value of money? She gets pocket money but doesn’t usually save any of it.

A: Clare Francis, director of savings and investments at Barclays, says: “As a parent, trying to teach your child the value of money can be tough.

“You’re already giving your daughter pocket money, which is a great way to start helping her to understand money and its value. And the fact she’s not been able to spend it recently means she can also hopefully start to grasp the concept of saving.

“You can bring to life some of the different things money could now buy her, and even suggest some ‘stretch’ ideas she could afford if she built up a little bit more. You can then help her celebrate her progress with a weekly money counting session and a chart helping her see her progress towards her goal.

“Then let her go out and buy what it is she wants – it’ll probably feel really rewarding for her to know she’s been able to buy that item because she’s saved for it.

“It can also be good to give children the opportunity to boost their pocket money savings by doing extra jobs to earn money, such as washing the car or cleaning the windows.

“As well as learning how to save, the other angle of understanding the value of money is the budgeting side of things and the fact your money will only go so far.

“Talk to your daughter about your finances and the fact that every month there are certain things you have to pay for such as the mortgage or rent, gas, electricity and food, so you need to make sure you have enough money to pay for those, then any extra can be put towards the nice things such as days out, holidays and Christmas.

“It’s important not to shy away from conversations about financial matters so you can try and give your child a good grounding and basic understanding as it will make it easier when it comes to them having to do it themselves.

“With most children not at school at the moment, one idea to help teach them about budgeting is to give them some money every day for their snacks and then price up some of the options in the cupboard: maybe 20p for a bag of crisps, 10p for a biscuit.

“It’s then up to them to decide whether to blow it all in one go, or spend carefully so they can have a few snacks throughout the day. Not only does it help them understand there’s a cost to everything, it might also stop them eating you out of house and home!”

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