Teaching money skills: Pocket money section for parents and children

Teaching early money skills:

Start with giving pocket money in 1p coins. Children find it hard to associate a 2p piece with 2 x 1p pieces.
When you have time play exchange games swapping the 1p coins for 2p pieces, and then 5p pieces. Gradually work towards 10p pieces. Explain that there are no 3p or 4p pieces.
Use the language of money: spend, earn, save, budget, cost, value, coin, bank, cheque, cards (credit, debit, switch and store) debt, owe, change.
Talk about how you use money, where you get the money from - including family credit and other benefits.
Talk about their spending power and share in the excitement they feel when they have saved up enough to purchase their product.

Teaching money skills to older children:

Set up a 3 part scheme with your child/ren. Have one pot for spending, one for saving and one for giving. These three are all important aspects of good money management. Do not ask children to put an equal amount in each pot - talk about the proportions and revisit these regularly.
Set out a clear list of items for spending. Get your child/ren to monitor what the cost of their regular purchases, encouraging them to look out for offers. If they save money in this way, allow them to spend the savings on treats.
Look out for savings accounts which provide interest. Check these with your child/ren and place their money in the best account. Remember to check all the terms if you are saving up in order to withdraw money at certain times of the year e.g. for larger purchases, holidays, outings etc.
Encourage your child/ren to keep a record of their spending - model this yourself.
Discuss ways of saving money.
Know your rights as a shopper, and share this with your child/ren. Educate them to be aware of how to approach the retailer if there is a problem with a purchase. Support them in this area so that they can claim a refund successfully without entering into an argument or feeling negative about the experience.

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Extra tips for parents

Teaching money skills

Pocket Money ideas for these age groups...