Teaching Your Child About the Importance of Money

Money, money, money

Raising children in a financial hub such as Hong Kong means they are likely to come into contact with people from all economic backgrounds. From getting a special treat at 7/11 with their allowance or using their Octopus card on public transportation, our kids soon realise that money has an impact on their lives. Here are five tips to help children learn all about money – after all – it makes the world go around.

Get involved in charity

One of the best ways for children to value money is to learn how it can help others and this can be done in one of two ways. One way is to directly give part of their allowance or pocket money to a charity of their choice. You may like to choose one for the whole family to support. Get involved and find out as much as you can about the charity and ensure your child has a say in choosing something important to them. Make sure you share updates with your child so they can see exactly where their money is going. Many charities will give information on how even small amounts can be helpful and so your child can see the impact of their contribution.Another way to give back to charity is to get involved directly in charity events. Lots of organisations put on sponsored walks or other activities for children – you can also organise these yourself. Bake sales are a great way for your child to be responsible for raising money and this is an activity they can be fully involved in from start to finish.

Check out Little Philanthropist, an organisation set up by two young girls, aged 6 and 8, who had a passion for giving back and made it happen with the the help of their family and friends. They organise several events in hong Kong that your little one could get involved in.  You can get more information from their Facebook page.

Help with the shopping

Children love being given responsibility; it’s a great way to empower them and boost their confidence. Children will love to be given specific jobs when out shopping and one of the ways to support financial management in the shops is to compare prices of products. This can be turned into a really fun game as they hunt the cheapest items. Obviously cheapest doesn’t always equate to the best quality and this is another lesson you may want to teach; so instead you can also encourage them to look for specific brands.  You can also give children responsibility for handing over cash at the checkout and checking if they have enough. For young children, the sight of a credit card can convince them that money isn’t actually necessary for purchases and so showing them hard cash can help them understand the reality of money.

As children get older you can give them a shopping budget and task them to get certain items within that budget. They may realise they can’t get everything on the list until they shop around for cheaper items or opt for cheaper solutions. Can they complete their shopping list under budget?

Encourage them to save

Encouraging children to save can seem like an obvious suggestion but it is certainly one of the most valuable lessons to learn. Support children by saving cash in a glass jar so they can physically see the money mounting up – this visual gratification will make the process more exciting. It can also be a good option to save for something in particular or for a set period of time. End goals can help children with processes such as these. Once they have the correct amount they need, they can take the cash to the shop to purchase the item they’ve wanted. The joy of knowing they have achieved this reward through their own savings will show them how satisfying saving can really be.

The principles behind saving are based on the idea that good things come to those who wait. To consolidate this metaphor you can look at growing a plant. Complete the process from start to finish – make a day of shopping for the products you need and planting your seeds. Then encourage your child to take on the task of watering it and gaining $10 HKD every time they do. They can then watch their savings grow alongside the plant.

Give them pocket money for chores

Giving children their allowance or pocket money for completing chores teaches them that money needs to be earned. You can also allow them opportunities to ‘earn’ more money if they are saving for something special. Don’t fall into the trap of paying children for all tasks though as it’s also useful for them to recognise that they should help out without expecting a return. Having set chores that they need to complete to maintain their allowance will help combat this issue. Help them to monitor their earnings by recording them and they’ll soon see that hard work pays dividends. There are numerous ways that you can record this – create a book or a chart together; older children may even want to try their hand at a spreadsheet.

Play games

Children learn most about the world around them through play and role play is one of the most vital components in children’s development. Creating shops and cafes is a great way for children to understand the basic principles of exchanging money for goods. Using real money in role play is not only more exciting for the children it makes the games more realistic and this is great way to utilise all the odd cents that you have in your purse.  You can easily set up role play corners/stations at home with items you can find lying around the house and create shops selling all manner of things. You can even make things to sell. Children will also love getting out their tea sets and creating a cafe. Let them ‘write’ the menus (depending on their age) and price up the items that are for sale. You can also play games online to teach about money and there are numerous apps that can also assist. Try Famzoo for young children or PiggyBot  which will assist your children in making saving fun.

Read more: Why is Play so Important for Children