Here's a scary statistic. By the age of 17 (yes, just 17!) more than 50% of children have either been in debt or are still in debt. That's according to research conducted by the government agency EdComs in 2007.
The concept of saving money so that it builds up and you can buy something, but later, is a really tough one to convey to younger kids. But it is better to start sooner than later. Especially if you want your child to avoid that debt trap.
The concept of saving
I've recently found out just hard the concept of money can be for little ones. Last week my six year old decided he wanted something from the toy shop that cost £20. But, he only had £5 of birthday money left.
So, now we're having a go at learning how to save up money to get that more expensive toy. It is a little harder than I thought it would be though. I thought I had done a fairly good job of explaining to him how money works, how you get money (you earn it by working) and what the purpose of money is.
But clearly I hadn't quite got there. He could grasp quite easily that he could put his money together and save up for the toy, but not about how that money was going to appear or the length of time it would take. Ever since, I've had him ask every day if he was getting his toy that day.
Since he gets £2 of pocket money a week, it is going to take a little longer than a few days!
The blog, Family Budget Ideas, has some good tips on How To Teach Children to Save Money.
The blog's number one tip: "Knowing what money means is a great place to start. As soon as they know how to count then money can be introduced. Keep things easy for them to understand and use role playing to introduce concepts for them".
The second tip is to show them the value in saving money.
We've made a chart. Just a piece of card on which I've drawn three columns, and 20 rows. Each row represents £1 until he gets to £20. So far he's got £5 on there and if he doesn't blow his pocket money on Kinder Eggs this week, he'll have another £2.
I'm hoping that this visual representation will allow him to track his savings, and see them grow.
The reason we're doing it this way, and not by putting the money into the piggy bank, is that he still doesn't quite get that a £5 note is worth more than a £1 coin, and that it isn't the number of coins you have but how much they add up to that counts.
That's something we'll tackle properly over the coming weeks using his play money. But for this purpose I needed a concept he could grasp a lot more quickly.
The whole exercise has made me realise how ill prepared I am for dealing with this. My son needs to learn how to manage his own money, and I don't think you're ever too young to start to grasp that concept. What do other people advise?
Where to put the cash your children are saving? Apparently, according to government research undertaken in 2007, 42% of children prefer to keep their cash in traditional money boxes.
You could make one out of an old tin, box or plastic container. Getting the kids to decorate it will give it more of a personal feel. We've found here on PlayPennies that something a little more high tech goes down well.
That's the Science Museum ATM money bank (see picture above). It comes in a mini version too, and this one was flagged up on our website on Saturday, on half price offer at Argos. Click here to read more about the Science Museum mini ATM money bank.
There's something about physically seeing the money building up that seems to be inspiring for children.
It rather inspires me I have to say!
What are you favourite tips for helping to get the kiddies to save up their money, instead of spending it all straight away (usually, in my experience, on sweets)?