Our Strategy and Insights Director Sarah Porretta shares her own experiences of talking money with her family.
A year ago during Talk Money Week 2018 I pledged to start giving my kids pocket money. As UK strategy director for financial wellbeing, I decided I really had to walk the talk and ensure I got my two children, aged three and four at the time, off to a good start.
How I thought talking money with my children would go
So, equipped with two jam jars I set them off on what I hope to be a lifetime of saving and good money management. I had visions of handing over a weekly £1 coin, filling their little purses and then taking them for ceremonious trips to the local toy shop to spend their precious stash, handing over coins from sticky palms to kindly shopkeepers. This is not quite how it went.
How it actually went
As a full-time working mum who doesn’t even take her wallet to work these days – I transact almost entirely via contactless on my phone – I would find myself in a museum shop with my child gazing longingly at a pin-on elephant tail, or I’d be queuing up at the corner shop buying emergency milk while my youngest clung wildly to a Frozen magazine off the rack, but with no means of helping them pay except via my phone.
Never did those carefully filled jam jars and the kids’ dream purchases collide. I felt like I was getting it all wrong. In addition, invariably we’d forget to give them pocket money on a regular basis or if we did remember we just wouldn’t have any cash in our wallets.
10 things I learned
So can it be done effectively with really young kids in a busy, cashless world? This is what I learned:
- Get a bag of coins and hide it, so that you can dole out a coin when you remember – it really doesn’t have to be regular when they are little.
- With really young kids stick to coins of the same value – so a bag of 10p or £1 – whatever you can afford as it makes it easier to count.
- Spend time counting out the coins in the jar at home so they get a sense of the pocket money growing and can handle the coins, so they have a tangible sense of what money is.
- When your kids ask you for something tell them how much it costs. With my youngest I would just say “15 coins” or “3 coins” so she started to get a sense of how much from her jam jar would disappear for different items. You can build up to different value coins as their numeracy grows, but start simple.
- When they really want something, show them comparable items e.g. “this is 5 coins”, “this is 12 coins”, or “that is too expensive, you don’t have enough coins for that”.
- Let them choose what they want to buy, within a price range you can afford, don’t make them choose something that only you think is worthwhile as they need to learn what is valuable to them and what isn’t. Let them make mistakes.
- Let them know that when you pay on phone or card, they’ll need to pay you back when you get home. The effect of counting each coin back into your hand really does have an impact. It had a particular impact with my kids if one chose something more expensive than the other, as the child who chose the more expensive item would find it really hard to hand over more coins than their sibling.
- Let them help you make choices about things you were thinking of buying – “shall we buy this yoghurt which is 2 coins or this one which is 3 coins”?
- Talk about money: Talk about why you aren’t going to buy something for them and give reasons that are true. Whether it’s that you are saving for a big expense next week, that you don’t like buying disposable plastic things, that that item isn’t good value, or even that you don’t like it, just say it.
- Vocalise the choices you are making about your own money – whether it’s food, or a coffee – or ask them to guess how much those things might cost. Talk about when you have made the choice not to spend money and why e.g. I always talk about why we have chosen to take a packed lunch out somewhere at the weekend, and how many coins it has saved us and what else we might do with that money.
Take opportunities to talk
Last of all, don’t let perfection get in the way, and don’t worry if you can’t afford to give pocket money. Literally anything you can do to talk about money, give your kids experience of handling and spending money or making choices for themselves or for your family is worth doing.
Don’t worry about the frequency, the way you do it, when and where it happens. You will be giving your kids an amazing gift: a skill for life that they can build upon as they get older.
There are more tips and ideas for talking money with your children on our Money Advice Service website.
Start a conversation about money
Each November, MaPS highlights a week dedicated to getting the UK talking about personal finances, from pocket money through to pensions. Learn more about Talk Money Talk Pensions Week 2019 and follow our channels to keep the financial wellbeing conversation going all year round: LinkedIn, Twitter and our monthly newsletter.