Teaching Children To Be Financially Savvy


pocket moeny

I was at the park the other day with my 6-year-old son. It was a sunny day and a perfect day for an icecream. My son asked me for an icecream but I hadn’t brought any money with me so I said no. A kind father of another child overheard my conversation and offered to buy the icecream for him. I refused his offer, not least because he was a stranger, and told him that I wanted my son to learn that he can’t always have what he wants. The man said, ‘Maybe that’s where I’m going wrong.’ Part of me agreed with him.

icecream van

I think it is important for my son to learn that he can’t have everything he wants all the time. Being able to delay gratification and having self-control has been found to have positive outcomes for children in terms of performance at school and relationships. Recently, I went to a village fete and I decided to give my son an allowance of £5 to spend on food, drinks and games. I told him that any money he had left over, he could save towards a Minecraft toy that he really wants. When we got to the fete, he was quite careful about what he spent his money on. He did buy a drink, some popcorn and played two games but he decided that he would save £3 of his money towards his toy. I felt that he had learned a lesson about not spending money frivolously.

On the other hand, I want my son to understand the value of money without him be overly worried about it. Sometimes, as parents we might avoid buying something for our children by saying that we can’t afford it. This can give children the impression that we don’t have enough money or we don’t have control over our finances. Children need to understand that there is a difference between things that we want and need. For example, if a child wants a new Minecraft toy for £100 but they already have a lot of Minecraft toys, you might talk to them about how long it would take to save that amount of money if they were working as a shop assistant with other bills to pay. As a parent, we can say to our children ‘I don’t choose to spend my money on things that we don’t need unless it’s a special occasion.’

Research suggests that the more open we are about our finances, the more financially savvy our children will be. Many parents shy away from talking about their family income or debt with their children as they don’t want this information to be shared with others. However, communicating with our children about these topics can be useful in the long-term. Perhaps once we feel our children are old enough to keep these details private, we should talk about them. What do you think?


Does being the oldest, youngest or middle child affect personality?

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birth order

Parents often talk about the differences between their first-, middle- and last-born children and say these differences must be inbuilt as they treated their children the same. However, parents often forget that the experiences of being an older, middle or younger sibling can be quite different. Parents are often very attentive to their first-born child and follow rules such as being strict about how many sweets they allow their child to eat but by the time they have a second child they become more relaxed about the rules. When parents have a second child, they often expect their first-born to be more responsible and they often have to grow-up quicker than later-born children. The first-born child also has to deal with the shift from having their parents’ undivided attention to having to share it with a sibling. As a result, firstborns are viewed as responsible, conscientious, cautious and achievement-orientated. Parents tend to be more relaxed in their parenting style after their first-born child and later-born children are often more liberal and rebellious. Middle children suffer from being neither the oldest nor the youngest child in the family, which can lead to identity problems. They may wonder where they fit in and this can lead them to be sociable, people-pleasers with a tendency to rebelliousness. The last-born child is often babied as parents are less keen for them to grow up quickly. This may lead the youngest child to be less responsible, rebellious and sociable.

What does the research say about birth order effects?

Sulloway (1996) in the book ‘Born to Rebel’ discussed the findings of numerous studies, which show that first-borns are more conscientious but less agreeable and less open to new experiences than later-borns. However, when spouses are asked to rate their partners on personality characteristics, birth order seems to have no significant impact (Jefferson et al. 1998). On the other hand, there is clear evidence that first-born children achieve more both in terms of grades at school and long-term financial success (Paulhus et al. 1999, Zajonc and Markus, 1975).

Sulloway (1996) found that later-born children are more agreeable, liberal and rebellious than first-borns.  However, birth order effects seem to have a greater impact on intellectual development than personality. Parents tend to be less attentive to later-born children as they have to divide their attention and this may make them less achievement-orientated (Paulhus et al. 1999).

Unlike children with siblings, only children do not have to compete for their parents’ attention. This has its benefits and downsides. Parents have the time to invest all their resources in one child; however, there can be a burden of expectation on an only child. As a result, only children are often viewed as conscientious and mature for their age. They often have close relationships with their parents and are keen not to disappoint, which can lead to perfectionist tendencies.

When children have to live with step-siblings as a result of separation, divorce and remarriage, children have to adapt their behaviour. For example a first-born child may end up having an older step-sibling in a blended family and cannot maintain their position as the leader. However, children do not tend to change their personality after 5-years-old so they will usually keep the personality characteristics related to their birth order even if they have to change their behaviour. On the other hand, a 3-year-old first-born child may adopt some personality characteristics of a later-born child if they start living with older step-siblings.

Should I let my child cheat at boardgames?

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Between the ages of 4- and 5-years-old, children should be able to abide by the rules of a game but it is not until 6- to 8-years-old that they learn how to be good winners and losers. Therefore, parents need to handle playing games with young children carefully.


‘Should I let my 4-year-old daughter win when we play snakes and ladders?’

4-year-old children are able to understand and abide by the rules of a game such as snakes and ladders but they are going to have trouble losing. Therefore, there are different strategies that parents can use to keep games fun. One strategy is to offer your child an advantage such as being allowed to throw the dice twice rather than once or being allowed extra throws of the dice if you are ahead. Another way is to change sides or counters during the game every three moves. Alternatively, you can play until everyone gets to the end and everyone wins the game. As your child gets older, they will want to play by stricter rules to make the game more challenging but while they are young, it is a good idea to remove the competitive element of the game.

However, if your daughter tries to cheat during the game such as changing the number on the dice or moving their counter ahead, then stop the game as it is important that they learn not to cheat. Explain to her that cheating is not okay and that it stops the game being fun. You can reward your daughter with a sticker or some other kind of token at the end of the game for playing fairly.