At GoHenry, we want the next generation to grow up with the skills they need to manage their money. The skills that will give them the confidence to build a great future and avoid becoming the next Generation Debt.
We understand that it's sometimes tricky talking to kids about money. If you don't feel especially confident about your money management skills, knowing where to start with your child's financial education can be difficult. That's why we've created The GoHenry Money Guide.
Here's the good news: you don't have to be a financial whiz to teach your child how money works. We believe that there are four pillars of money management – Earn, Save, Spend and Give – and we've come up with five simple ways to help kids grasp the basics.
Use discounts and vouchers & ask kids to think twice before buying an item
Whatever their age, your child is already forming their future money habits. And, like most things, they learn these from you. You might think they're too young to notice, but it's great for them to see you checking the bill in restaurants, using smart ways to save money and making sure you've been given the right change or shopping around to ensure you get the best price. If you want to teach your child about spending, saving and delayed gratification, it's essential to practice what you preach.
Some good ways to show them how to spend more smartly is to:
- Use discounts and vouchers and utilise these when shopping to show kids how you can get products for less and better deals for products from toys to trainers and phones.
- Suggest that they always stop and think twice before buying an item. Tell your kids to give themselves a 24 hr cooling-off period before buying something they want to see if they really want it.
- Spend less (than you earn). Show kids that making money and saving money is a balancing act, and spending more than you earn is a recipe for falling into debt.
The GoHenry Money Guide is designed to make financial education easy.
There’s a guide for every age group, so click on the links below to find out what your child needs to know next:
Get them to understand cash and cards
We live in an increasingly cashless society where kids are used to seeing us pay with the tap of a card. As a result, money is becoming an increasingly abstract concept for them to grasp.
We created GoHenry to ensure kids aren't excluded from the digital economy. We give children their own card and banking app, meaning they can get a grip on digital basics like savings, protecting their money, spending logs and regular payments. But, to get the complete picture of money, kids still need to understand cash.
As a starting point, play shopping games with young children, and give them the opportunity to pay with coins and notes at your local shop. This helps familiarise kids with the concept of receiving change and shows them the amount of cash reduces as they spend.
We suggest giving children a set amount of pocket money each week that they have to manage themselves. Our data reveals that most pocket money is paid on a Friday (43%) or Saturday (33%) so that it's ready for the weekend. Explain that they are responsible for looking after their GoHenry card – and remind them that once their money has gone, it's gone for good.
This is also a great time to show them how to budget and set clear financial goals around spending and saving so they start to understand how to make money last longer and how to help their money grow.
Remember to talk about these issues in an age-appropriate way: explain the link between earning and money, introduce the concept of budgeting – and make it clear that we can't always buy all the things we want straightaway.
Alongside this give children the opportunity to earn their own money for doing everyday tasks around the house teaches them valuable lessons about working and earning that will set them up for life. Before they're old enough to get a part-time job, they could earn a small amount of money for tidying their room, doing the dishes or feeding a pet. With younger children, you could encourage good behaviour – and good habits – such as going to bed without a fuss, brushing their teeth or practising their spelling. It's not important how much they earn, as even a small amount will teach them about the value of work.
"I now think much more carefully before I buy something as I want my money to last. I have to work really hard to earn the money each week with my chores, so I don't just want to spend it really quickly without thinking about it."
Carys, age 9
Protect your savings
Saving is one of the trickiest concepts to teach kids – why should they wait weeks (or sometimes months) to buy something they want when they could enjoy spending all their money today?
You can help children see the benefit of putting money aside simply by setting up a savings goal. This needs to be tangible and achievable so that every penny they save takes them closer to buying whatever is on their wishlist.
Talk about their progress and celebrate when they've reached their goal – once they've experienced the excitement of buying something special with their own money, they'll want to do it all over again.
"My parents suggested I set up a savings goal, but it's my choice how much I put in it. I often put extras from chores in, too. It's really satisfying watching it build up and knowing that it is me that has created that."
Tom, age 11
Donating and giving back is a very personal issue – but children develop a greater understanding of the value of money when they get a sense of how it can benefit others.
There are lots of different ways to teach your child about giving: they could sponsor a friend or family member, take part in a fundraising activity like a fun run or cake sale, donate clothes and toys to charity, or volunteer at community events. On a more personal level, they could treat a friend to ice cream, or buy them some sweets when they're short of money.
Older kids and teens might decide to donate money to charity on a one-off or ongoing basis. This is a great exercise in financial decision-making: they might want to donate to a high-profile event like Children in Need or Comic Relief, or perhaps they'd prefer to support an environmental charity or a local animal sanctuary.
Encourage them to get involved and support their efforts – they'll soon discover that giving is a rewarding thing to do.
Encourage them to use Money Missions
On the GoHenry app, you'll find Money Missions designed to help kids learn everything they need to know about finances. Money Missions improves your child's financial education around saving, earning and budgeting fun, building confidence, literacy, and curiosity in 6-18-year-olds. Kids can watch animated videos, take quizzes and earn points and badges as they progress through the levels.