My eight-year-old son has saved birthday and pocket money over the lockdowns and is planning a spending spree as we return to normal. How can I encourage him to spend responsibly?
Rachel Kerrone, a former money and parenting blogger who oversees Starling Bank’s (starlingbank.com) child banking services, says: “With toy shops and days out off-limits for much of the last year, children simply haven’t had the opportunity to spend as normal.
“Our research shows they’ve saved an average of £150 from things like pocket money and tooth fairy earnings, and are now looking to treat themselves.
“Teaching children good saving and spending habits starts with talking to them about money from an early age. Making money part of everyday conversations is really important in breaking down the taboo.
“Try helping your son divide his pocket money into three pots: one for spending, one for saving and one for sharing. It’s a great way to get in the habit of balancing spending and saving for things and potentially even to encourage sharing with others such as siblings or friends.
“Don’t underestimate the spending element though. We’re often taught saving is good and spending should be capped, but you can teach your child to be a responsible spender too. Explain that different shops can have different prices for the same item and sometimes they have deals and sales, which means he could buy what he wants for less than it normally costs.
“Buying things together when you’re out, discussing his choices and what he can buy within his budget can help your son appreciate everything has a cost. Provide context by referencing prices in terms of the chores, or weeks’ worth of pocket money, they represent. Is that comic worth mowing the lawn twice for?
“These tips also apply to online shopping, except you’ll need a way for your child to spend their money safely online. I’d recommend a children’s bank card where you have oversight of their spending. Otherwise, if you’re going to use your own bank card, make sure you sit with him and take cash from the piggy bank as he makes the purchase, so he appreciates what’s happening.
“If you need more advice, MoneyHelper (moneyhelper.org.uk) has a series of guides for teaching children about money, or Starling’s Money Explained series (starlingbank.com/blog/tag/money-explained) tackles the basics of family finance.”
