As most parents will attest to, talking to kids about money can be tricky at times. But the earlier you can start having open conversations about saving and spending, the easier it is for kids to gain confidence in money management.
In our new series, Ask The Money Mate, we’re speaking to real-life parents and kids to hear their feelings on finances – and we’re putting their dilemmas to our expert, David Coleman.
As a clinical child and family psychologist, plus the author of three books about parenting, David will be offering practical, accessible advice – and helping kids and parents to start honest conversations about money.
First up in our series: Mum-of-two, Sarah Twigg Doyle. She lives in Wicklow with her husband and their kids, 12-year-old Olivia and 15-year-old Noah.
“The kids tend to use their pocket money for smaller purchases,” says Sarah. “Each year their granddad gives an amount that goes into their savings account. If there’s something really really important they want, we’ll sanction them taking some money out for that – for example Noah is going to Spain next year on a school exchange programme.”
So, what’s Sarah looking for help with?
“I’d love some help with getting both kids into more of a saving mentality,” she says. “My daughter in particular loves a trip to Penneys to spend her pocket money. We operate a chores-for-pocket-money system at home, so in her mind, she’s worked for the money, be it €2 or €10, and she wants to spend it.
How do I turn around and say to her, ‘Well actually, how about not spending it on that t-shirt or lipgloss and putting some of it away instead?’ How do I get her interested in the prospect of building up some savings?
Here’s what David Coleman has to say…
“For a child Olivia’s age, life is lived in the now, so saving, particularly if it’s just for a rainy day, can be a difficult concept for her. So pick something she’s interested in, be it a toy or spending money for a holiday. Then sit down with her and do the real life maths of how much she’d need to save to reach that goal.
“How much does she have right now? How many weeks of pocket money would she need to put aside? Are there other things she might want to spend money on in the meantime, like food or sweets or a trip to Penneys? Are there ways for her to ‘earn’ extra money along the way?
“For children to learn how to save, they need to have a strong, potentially expensive goal that’s really attractive to them. It needs to be something they will want to save for.”
David’s tips for helping kids become confident spenders and savers…
1. Never loan money: “This is a big one, even if it’s just €1 for a chocolate bar when they’ve left their pocket money at home.”
2. If you’re offering money as a gift, be clear on your reasons: “Giving a child money for something you see the value in can be a positive thing, and it’s different to handing out money just because your child has asked for it.”
3. Allow them to make mistakes: “It’s really only when we suffer in small ways that we learn about the mistakes that we make. So if your child has spent all their birthday money in one go, against your advice, don’t bail them out. Listen to them if they’re upset and discuss options for next time.”
An Post Money Mate is the new account available for children aged 7 years to 15 years and six months. With An Post Money Mate, your children learn how to earn, save and spend money with their own debit Mastercard and app. They get independence, you retain control. Download the brand new An Post Money app to get started.
T&Cs apply. The An Post Money Mate Debit Mastercard is issued by An Post. Mastercard is a registered trademark. A monthly maintenance fee applies. An Post is authorised by the Minister for Finance to provide payment services and is regulated by the Central Bank of Ireland in the provision of such services.
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