Money Lessons for Kids

October 2018
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When our children start school we expect them to acquire a wealth of new knowledge and skills, and they generally do just that. But schools are under such pressure to meet academic progress and attainment targets that some of life’s most important lessons are sidelined. According to research earlier this year by Halifax, our children are pretty out of touch with reality when it comes to money – according to them:

  • A pint of milk costs £17 (it’s really 44p)
  • A doctor earns £271,000 (salaries start from £27,000)
  • The Prime Minister earns £3m (£150,000)
  • A Premier League footballer earns £4m (not far from the truth at £2.6m!)       

It’s clear that we need to work on financial literacy as nation and in May 2017 some sixteen major savings and investment providers invested a collective £1m to launch a charity called KickStart Money aiming to take financial education to 18,000 primary school children. But this will reach just a fraction of the population. So parents need to plug the gap and teach our children good money habits.

For most these lessons begin with a piggy bank or pocket money. A regular allowance in return for the completion of household chores or in reward for keeping up with homework teaches children that money is earned not just received. By providing a regular weekly or monthly amount, children can be encouraged to save some of their allowance (for a new bike or trainers) and will begin to understand that if they spend all their money on sweets and magazines one week, it will take longer to reach that savings goal. If like many of us you’ve found it hard to keep track of paying regular pocket money there are now a number of apps available which can help.

Apps for Primary Aged Children

For those with younger children an app that rewards good behaviour or chores completed like RoosterMoney or iAllowance may be worth considering - the latter allows you to set non-monetary rewards such as screen-time or getting ice-cream. While they both provide useful ways of tracking earnings, savings and rewards, neither of these incorporates real money via a prepaid card so when your child wants to ‘spend’ their allowance or buy that new bike they’ve been saving for you’ll have to be ready to foot the bill.

Apps for Secondary Aged Children

Apps aimed at all age groups enable children to set savings goals and show their progress towards them which helps to teach basic budgeting. The ones aimed at older children such as Nimbl and Osper have less focus on rewards and chores and with a prepaid debit card included are more useful for teaching children good spending habits. Parents load the child’s card with their pocket money and then receive real-time notifications about the amount being spent and where. You can also set rules to allow various types of spending (cash machine, debit card payments, online shopping), and because the card is prepaid there’s no way the child can overspend.

 

 

Rooster
Money

iAllowance

GoHenry

Nimbl

Osper

Aimed at ages

4+

4+

6-18

8-18

8-18

Prepaid Debit Card

No

No

Yes

Yes

Yes

Set regular pocket money

Yes

Yes

Yes

Yes

Yes

Set tasks/chores for extra money

Yes

Yes

Yes

No

No

Set non-monetary rewards

No

Yes

No

No

No

Parental controls/ spending rules

N/a

N/a

Yes

Yes

Yes

Set up regular outgoings

Yes

No

No

No

No

Set savings goals put money aside

Yes

Yes

Yes

Yes

Yes

Set charity goals & put money aside

Yes

Yes

No

No

No

Parental spending notifications

N/a

N/a

Yes

Yes

Yes

Cost

£1.99pm/ £14.99 per year

£2.99 for iOS app

£2.99 per child per month

£15 per card per year

£2.50 per child per month

Free/trial version available

Yes

Lite

 1 month

 1 month

30 days

 

Don’t Forget…

While these digital pocket money apps are handy and make the process of managing pocket money easier to manage they won’t do the job on their own. There’s plenty of evidence to show that children learn their spending (and saving) habits from their parents. If they see you splashing out on luxury items whenever you want them they’re likely to follow in your footsteps. If you can be seen to saving up for special treats or simply saying no to something you can’t afford you’ll be helping your children get into good saving habits.

Heather Lewis
Marketing, LEBC

Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views.

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