When we were young and blissfully ignorant of how the world really works, we could easily become upset with mum and/or dad because they wouldn’t buy us that oh-so-expensive toy in the shop.
As we grew older and began to understand the concept of money and its value in society, we also began to understand that, as much as we would love to, we cannot afford everything on the store shelf. Some learn the value of money at an earlier stage in life than others, while there are those that still do not truly understand its value and the potential impact that even just a penny can have.
Children and Pocket Money
The most common way of parents to teach their children the value of money is by giving them pocket money or a weekly allowance. Often, children will have to earn their pocket money by carrying out chores around the house (within reason and age appropriate) – teaching the valuable lesson that you don’t get something for nothing.
When a child is simply given money without having to actually earn it, the concept of its value is lost on them. The difference between being given and earning pocket money is that the child who has earned it will then be less willing to waste it away – a valuable lesson that will stay with them for the remainder of their life.
The Impact of Money
In the child’s mind, money is something that adults exchange in return for goods at the shop. In childhood, they do not understand (nor should they have to) that finances are what keep the roof over their head, the food on their plate and water in their cup.
What they can understand is the concept of charity and how different causes help others in far less fortunate situations than they find themselves in. At school, children regularly take part in charitable initiatives such as Red Nose Day for Children in Need and other events that get them involved in something for fun all while raising money for charity.
In Muslim families, the act of giving makes up one of the core values of their religion, especially during Ramadan when charitable donations are made. As well as finances, it is taught the other commodities such as food, clothing and even time itself make for valuable donations.
The Power of Saving
For a young child around the age of five or six that are just starting to form the cognitive skills to understand the value of money, any amount of money is like a hot potato. The overbearing need to spend it as soon as they receive it eclipses any thought of saving up their funds in order to afford something bigger and better.
As a parent, teaching children the value of money cannot be done without teaching the benefits of saving. With a weekly allowance of £5, there isn’t much (of value, anyway) that they can buy. However, if they were to save up for a month, that would leave them with £20 which can buy them a whole lot more than the initial £5.
Of course, this comes with the sacrifice of not buying anything for a few weeks, which for a young child just beginning to understand the value of money is a tough one. Be inventive with the way that you teach your child to save, with some ideas including:
- A piggy bank – to save up all of those loose coins
- Let them choose their own savings goals and keep a tally of where they are
- Open a bank account
- Let them make mistakes – the best way to learn is through experience
When your child masters the concept of saving, they will have a clear understanding of the value of money and why it is important that they do not waste it away the moment it comes into their hands.
As the world turns into a digital playground and physical coins and notes turn into a rarity, with card payments becoming the norm, teaching children that money is something more than a simple swipe of a credit card is an important lesson.
Disclosure: This is a sponsored post.