Start as you mean to go on
22nd December, 2020
We’re headed into a new year and with that comes an opportunity for new routines and resolutions, so get your family off to a smart start and begin taking advantage of everyday teachable moments to model good money sense and help empower our next generation – financially and otherwise.
For better or worse
Research tells us that children actually begin learning about money at a very young age. In fact, a report commissioned by the UK Money Advice Service revealed that kids money habits are “formed by age 7”1. We, as parents, are the #1 influence on our children’s financial behaviours, so don’t underestimate the impact you can have – for better or worse.
Where to begin
A weekly allowance, or pocket money, can be a great way to help kids learn the value of money and how to manage it effectively. There’s no better way to begin teaching children about money than giving them the opportunity to manage and make mistakes with their own. With that said, there’s a delicate balance between paying your child to do work and ensuring your child doesn’t expect to be paid for everything they do.
Chores vs. jobs
It helps to distinguish between chores and jobs, although these words are often used interchangeably. Think of chores as being age-appropriate contributions children should be making as responsible members of the family – pitching in around the house in routine ways as well as when needed. Jobs, on the other hand, are a stretch – either because the task is beyond what you might expect of your child at that age or it’s identified as an additional opportunity to earn money.
Beginning at age 2 or 3, children could be given a weekly allowance and at the same time be expected to contribute in age-appropriate ways around the house (aka chores), so that the work they do is proportionate to the allowance they’re receiving. As a general guideline, I recommend giving €1 per year of age so that a 3-year-old is receiving €3 per week.
Think of it this way: as a member of the family, we all have responsibilities and ways we’re expected to contribute around the house – likewise, perhaps each family member could be given some amount of discretion over how money is spent on their behalf, which can be given in the form of a weekly allowance. As your child gets older, the responsibilities increase as does the weekly allowance.
On their own dime
You may find yourself mentally calculating what could add up to quite a bit, but your child is now responsible for ALL the extras. So the next time you’re out shopping and your child asks you to buy something they don’t need, you can say, “that’s what your money is for” and the cycle of planning and earning and saving begins.
Putting it into practice
Download My Job Chart. Help your child make a weekly plan for the jobs they aim to do and make “job checks” part of your daily routine. Certain jobs may need to be done each day and others only certain days of the week. There may also be unplanned job opportunities that come up and you can give your child a chance to earn extra money some weeks.
Download Job Brainstorm. Help your child make a list of the jobs they can do and how much they could earn for each job. Negotiate a payment for each job that is reasonable and fair, recognising that each job carries an innate responsibility as a family member, but also that you want your child to be building a sense of enterprise and a way to earn extra money for the “extras.” Remember to be clear with your child about what each job entails and how it should look when it’s complete.
Examples of household chores for kids based on age
Age 2 – 3
• Put dirty laundry where it belongs
• Pick up their toys
• Clean up small messes and spills
• Throw away their rubbish
• Help feed the family pet
Age 4 – 7
• Make their bed
• Help set and clear the dinner table
• Help put groceries away
• Sweep the floors
• Help water the plants / garden
Age 8 – 10
• Clean their room
• Fold laundry and put it away
• Empty and load the dishwasher
• Take out the rubbish
• Rake leaves and pick weeds
• Clean their bathroom
• Do the laundry
• Mind younger siblings for short periods of time
• Help cook dinner
• Walk the family dog
• Clean up the kitchen after dinner
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Just as we should start as we mean to go on, we tend to go on as we began. Learning the value of money in terms of what goes into earning it, what it can buy as well as how it can help others is an important life skill that takes a lot of practice, so you really can’t start too soon!
Our Cents for Kids monthly newsletter will give you insight and ideas about how to engage with your children around the topic of money in fun and practical ways throughout the year – subscribe here.
About Cents for Kids
Cents for Kids is focused on building financial literacy in children and supporting parents with the tools and resources they need model good money sense and teach their kids about money.
Marah Curtin leads the Cents for Kids programme in Davy and spends a lot of her time – both in her work and outside the office – supporting initiatives aimed at improving financial literacy and promoting financial inclusion, especially for women and our next generation of investors.
1Habit Formation and Learning in Young Children, by Dr. David Whitebread and Dr. Sue Bingham (University of Cambridge) was commissioned by the UK Money Advice Service to understand how and when core behaviours and habits are formed in young children.
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