Why make kids save money?
Saving money is a big deal world over. But should you get kids to do some saving too? This blog post is by Nicola Baird sharing ideas about thrifty, creative and eco-friendly ways to raise children. this post considers the risks (and benefits) of making our children into superkidsavers. For more info about my book Homemade Kids, with lots of ideas about parenting click here.
When it comes to money the number one rule is – the less you spend, the less money you need. By giving young children access to biggish sums (eg, the piggy bank) you are hot-housing consumer demand. Cash in hand they very soon go crazy for those little collectables that cost about a pound in the newsagents. And when that’s exhausted they will move on to bigger things (personal music systems, smart phones, particular brands of trainers). With that desire to spend in order to feel happy comes a serious loss of innocence.
Of course children need to learn about budgeting, saving etc. So how can families do that without pushing the green light that will turn their children into big spenders down the shops? Perhaps the answer is to make sure that when large sums of money have been collected (this could mean £5 or £50 depending on the child’s age and family circumstances) that this is spent on something that has long been wanted, and ideally something that gives your child an extra skill. A fabulous place to visit to help children reconfigure wants and needs is a place that sells unicycles, stilts, juggling balls etc. These items cost quite a bit, so are worth saving up for, but once you own them you may well need to practice long and hard in order to be able to master your new possession. There is absolutely no instant gratification – like charging up a phone or popping on a new top from Jack Wills/Honister.
Up to primary
My youngest daughter, Nell, 11, mostly makes money through her teeth falling out (a mere £1 from the tooth fairy and I understand the average London child makes between £2-£5 so she’s perhaps a little unlucky). She also occasionally gets sent cash at a birthday or for Christmas.
Watching her with her heavy purses I can see that she still judges money by weight. This is all wrong I know, but sometimes (when I’m feeling guilty about not giving her pocket money which should be £2 a week but often there’s none available on fridays) I offer to swap the heavy coppers for 10p bits – the influx of 10 pence in exchange for 5x2p or 10x1p may make her purse a bit lighter but more practical to use.
I was relieved when she did some maths homework recently and very eloquently argued that maths was a useful every day skill because you could use it to prevent shopkeepers and market stall holders from cheating you on the change front. Thankfully she didn’t add a line about parents cheating you on the change front… or indeed the pocket money front.
My older daughter, Lola, 14, is far more sussed about money. And so she should be – a London teenager needs to have some cash in their purse for all sorts of situations. Because I never seemed to have a fiver on Friday pocket money day, she opened a current account which I fill with a monthly direct debit arrangement. The account is with the most ethical of high street banks, the Co-op, and is able to access this so long as there is money in the account. I’m quite jealous of this arrangement as I waited years to open a Co-op account because I always seemed to be overdrawn each month and for some strange reason NatWest didn’t mind this (hello interest), but the Co-op didn’t want me as a customer. I am very careful now about overdrafts. To stay in the black I have some money rules:
- Where it is possible to swap a skill, or make it yourself, or trawl around a secondhand shop, then that must be considered (and ideally done) before parting with (or receiving) money. The adults use a babysitting circle, the kids look in charity shops for bargains.
- Household jobs do not earn the doer money. Making a bed, hoovering the stairs or washing up are normal activities and thus will not earn whoever does them cash.
- Homemade gifts and homemade cards are encouraged. It is lovely to see young people continuing a tradition of making highly personalised cards and gifts rather than wasting money on chemically-dodgy scented bubbles or make up from the pound shop which might well have been tested on animals.
I don’t know where this story will end. Maybe both my daughters will become so crazed for cash they’ll either be, or date, bankers.
Until then, here’s to downshifting the importance of cash and savings, just so long as there are some funds available if a crisis struck, or indeed your child developed an unshakable need for a particular thing that couldn’t be found any other way than by parting with slow-collected savings. That’s because a long want, and a planned campaign on how to spend makes that spending far more valuable.
When money is the greatest gift
That said the biggest problem for children – around December anyway but also name days/Christenings – is being swamped with too many toys. I loved having one special Sindy Doll to play with rather than a squad of 28 plastic dolls. If you’re trying to encourage your children to have a special connection with the things they possess then ask grandparents or generous friends to give money for a savings account, rather than another fluffy toy.
When the moment is right make use of that saved up money for getting the exact perfect thing – a sledge to play with in the snow; a robust no-pedal bike for scooting to and from nursery or a bunk bed so friends can enjoy sleep overs…
Over to you
How do you encourage your children or relatives to save? Would you give money for something a child/young person is saving up for or do you always like to buy a specific item for them? And what about not giving kids money – is it wrong or a wise attempt at stalling the inevitable consumer frenzy? I was motivated to write this piece after a jog from Mumsnet pointing to the Money Supermarket’s SuperKid Savers Challenge competition.