Saving ‘part of learning about money’ for children

Learning to save and realising that spending too much on credit is no way to live are important lessons for youngsters – the challenge for parents is to find a way to convey such truths.

When it comes to managing money, the challenges for the current generation are quite different from previous ones.

On the one hand, in real terms people are much better off and one manifestation of this is the fact consumers possess greater material wealth in terms of cars, labour-saving devices, gadgets for entertainment and so on than past generations.

This has further been extended by the development of technology that means many of the benefits of modern living from computers to advanced medicine were not available a generation ago.

However, the sheer cost of such items has done much to offset the increased affluence they represent. Energy bills are higher partly because we now use more power to run a variety of devices that did not exist in days of yore, such as computer games.

But for children growing up now, understanding all this is a thankless task, for the idea of a world without X-boxes and Playstations, smartphones and the internet is as alien to them as a world before TV would be to their parents.

But for adults wanting to teach children important lessons about the value of money, there has to be a way. Parenting and relationship journalist Kelly Rose Bradford acknowledged that the higher cost of items like games is one factor in making it harder for youngsters to realise the true expense involved. But she noted there is also another factor – not actually seeing cash change hands as many transactions take place by card or online.

She remarked: "It is more difficult for children to actually see real money changing hands these days, which is why early shopping games et cetera are so important.

"Making children save a certain amount towards larger purchases will also help teach them [to] appreciate the value, as will setting a good example yourself, by being careful with cash and promoting the idea that it is not fine to spend beyond your means on credit cards et cetera."

Using a budget planner may be a useful way of passing on such lessons to kids. By showing that money is a scarce resource and that items like computer games cost a lot of it, parents can help teach their youngsters how hard choices have to be made – while at the same time using the planner to help set their own budgets more carefully and sustainably.

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