Death of the
Piggy Bank

How to speak about money to your children with Maya & Kelly.

The move away from cash leaves parents struggling to teach children about money

The days of youngsters adding coins to piggy banks and counting out how much money they have are fading. Today’s children are more familiar with pocket money being paid by topping up prepaid cards, Internet or mobile accounts. So what can parents do to get their kids to appreciate how to better handle money in these changing times? It all starts with a conversation. 


Whilst almost 60% of women consider the primary role of wealth to be providing for the family, talking about money matters remains one of the great taboos. How can you teach your child the value of money if you’re not comfortable even discussing it?


“If we want to disrupt the confidence crisis affecting women in our financial dealings, it is essential we empower our children with the skill and knowledge to ensure they become financially confident adults” said Tamara Gillan, highly regarded industry change agent and founder of The WealthiHer Network.


The majority of this skill and knowledge must come from parents. Whilst financial management was introduced into the National curriculum in 2014, 87% of British teens still think they lack knowledge about credit cards, mortgages and pensions, and 77% want to learn how to budget.


“Children often don’t understand the value of money because it’s something they receive.”

Maya Prabhu

Steps to talking and teaching money management.

When it comes to money matters, there is no substitute for learning through experience – and it pays to start young. Here are three areas to explore as you help your kids get smart around money.

1.

Bring reality to an intangible resource

“Parents who have created wealth often come from a non-financially privileged background and know exactly how that wealth was earned,” said Maya Prabhu, Managing Director and Head of Wealth Advisory at J.P. Morgan Private Bank. “However, their children often don’t understand the value of money because it’s something they receive. In a world that often functions without physical notes and coins, you must get creative to make this seemingly unlimited and invisible resource real to your children"


For older kids

Introduce the concept of “making money work for you”: Help them experiment with their own money through saving, budgeting and investing.

For early teens

Get them a debit card so they can experience a £0 balance as well as a topped up one. Let them experience borrowing by giving them small “loans” from the house “bank,” with payments, terms and consequences.

3.

Unlock empowerment and
prosperity within your family.

“It’s important to explore your – and your partner’s – relationship with money so you can intentionally build a family financial plan in line with your values,” said Kelly Hearn, an accredited psychotherapist with an MBA from Columbia Business School.
“Financial health is crucial to overall wellbeing, but we must broaden the discussion so that money isn’t the only measure of value or worth.

The first step is to stay calm when talking about money. Part of effective role modelling is to show your kids that money discussions are a practical, essential part of life:

Be honest

about the real-life consequences of your actions. For instance, if you regret going into debt or not saving more for college, tell them about it.

Discuss your plans

for the future; establish priorities and show your kids how you put money towards your goals.

Model gratitude

and get your kids involved in your family’s philanthropic plan. Support their fundraising for a cause they care about.

Make it fun! For the youngest children, get a piggy bank and ensure they get “paid” in actual currency. When they have enough to spend, help them see and choose their options, e.g. one item for £2 or four smaller items for 50p each.

2.

Create a family financial framework

Your children learn best when they can watch your management techniques and practice them on their own. Be intentional and consistent about the money messages you give them, both in words and in actions:

Be prepared

to talk openly about your income, where it comes from, and what you do with it.

Focus kids’ attention

on what meaningful work they want to do (to earn money) and on what goods, services and experiences they value (for spending money).

Hold family budget meetings

where your children attend and contribute. (Just remember you and your partner make the final decisions!)

As is age-appropriate

let your kids in on your thinking and decision- making on the allocation of money. Show them how achieving goals requires sacrifice, such as skipping a holiday in order to save for a car.

“It’s important to explore your – and your partner’s relationship with money.”

Kelly Hearn

Maya's tips

Consider your money philosophy and the purpose of your wealth

Be consistent with your messaging around money, matching words with actions. children learn from your actions

Help your manage their money, and not let their money manage them.

When your children have money to spend, help them see the options and choices to make. e.g. one item for £2 or 4 smaller items for 50 p each. 

Be intentional about the messages you give to your kids about your values around money

Encourage their participation in making decisions relating to money in a fun way. For instance, in planning family holidays.

Teach important money management skills in age appropriate ways – to spend responsibly, to save, to borrow, to invest and to share – all underpinned by your values.

3-5

years

Use a piggy bank to encourage saving for things to buy in the future.  If you are worried about Covid;  sterilise the money out of sight of your children

6-8

years

Introduce spend, save and share jars, and talk to your children about how they want to spend, save and share

9-11

years

Set up a bank account and help your children to create a budget for their pocket money/allowance

12-14

years

Give your children a debit card so they can experience what it’s like to experience a £0 balance as well as a topped up; Let them know the consequences of borrowing. Have rules and follow through, whatever the amount borrowed; support their fundraising for a cause they care about

18+

years

Encourage them to research the costs of services that they require/things they want, e.g. car insurance, to give an understanding of the related costs of purchases; help them develop budgeting skills to prepare them to manage their finances at university; encourage their interest in philanthropy.