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Updated March 2020

Kids are like sponges, as many of us have found out when they’ve overheard mummy or daddy saying a naughty word. But did you know that they’re picking up your money habits too?

A study by the University of Arizona showed that children learn their financial behaviour from their parents. This means that kids learn more about money from mum and dad than they do from anywhere else.

Although 94% of parents think saving money for their child’s future is important, 13% said they never discuss money with them. This could be due to parents struggling to know how to approach the topic with their child.

We’ve come up with some activities you can do with the kids, whether they’re six or 16, that’ll help to teach them the value of money. That way when they fly the nest, they’ll be more than prepared to manage their finances.

Teaching toddlers

Just because your little one is still wrapping their head around numbers doesn’t mean you can’t find ways to encourage good money habits. Introduce them to the idea of looking after money by getting them to make their own piggy bank.

Wash out any clear container with a lid, whether it’s an old jam jar or a plastic bottle. Let your youngster run wild decorating it with whatever crafty stuff you can get your hands on.

After their masterpiece is complete, spur them on to put loose change into it. Start them off with a couple of coppers and tell them they can only spend the money once the piggy bank’s full.

You could also use this as a reward system. When they’ve been good, more coins go in and they get closer to getting that Playmobil. As they get older you can build on this idea by giving them money for doing chores and good reports at school.

Smart shopping

Let’s play pretend and turn your living room into a shop. Take some household items and put price tags on them, then give your child some money to spend.

Ask questions as you go to encourage them, such as, “so if that costs 5p and this is 2p, how much have we spent so far?” or “if you have 10p but the things you have here add up to 15p, what do we need to put back?”

You can swap roles with your little one and let them have a go at being the cashier. They can practice adding up, and try to give you the right change back.

Not only is this helping their maths skills but it inspires them to use their imagination and have fun. It also introduces them to budgeting and understanding that money doesn’t grow on trees.

Work and play

Remember that piggy bank from earlier? Now’s the time to take that further and help your children fill it up by doing chores. Motivate them to earn their pocket money by creating a job chart.

Put a value on each job, for example emptying the dishwasher gives them £1, and when they’ve done it they mark it on the chart. At the end of the week, you tot up the totals to see how much they’ll get.

Dig out a classic money-based board game like Monopoly or Payday and get the whole family involved. Games are a simple way to ease kids into learning about looking after their cash and accepting the costs of money mistakes. Do they try and buy as many properties on the board as possible, or save up and hope to land Mayfair?

If you can’t persuade them to join in with a board game, there are plenty of online games and apps that can educate and entertain. Even popular games like Minecraft can teach kids about being responsible with money. They encourage them to be accountable for their decisions and show them the consequences of pitfalls like impulse buying.

The road to responsibility

Once your children are starting to look less and less like kids and wanting more and more independence, allow them to be in control and show you trust them by putting them in charge of the online food shop.

You set a budget and they have to plan everyone’s meals for the week. If there’s any money left they can keep it for themselves, but they can’t ask for more. For some inspiration, check out our blog full of easy meal planning ideas.

They could also be the boss of the budget for a week in the school holidays. Let them plan the activities they want to do, not forgetting all the extra costs like transport and food. Remember, once the money’s gone, they’ll have to find free activities to keep them busy.

If they want another way to make a bit of extra cash, they could look into getting a Saturday job. They could take up dog walking or try their hand at a paper round.

When they’re ready to go it alone and head off into the big wide world, the thinkmoney Current Account is on hand for a bit of extra budgeting help. Because the money for bills is already put to one side, they know anything that’s on their debit card is available to spend. The app allows them to keep up to date and send money to their friends on the go.

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