About six months ago I was trying to sort out a gas bill which was overdue. I had laid the paperwork out over the table and was trying to work out if the amount we owed was correct. I can remember it like it was yesterday.
It was a Saturday afternoon, Chloe was fast asleep and Daniella was playing in the lounge. Naomi had gone out for the afternoon to see friends. I had played with the children in the morning in the hope I could get on with things after lunch.
Lunchtime came and went and after clearing up I put Chloe down for her nap. Daniella was going to read and I was going to sort out this nagging water bill. Everything was going OK, I had the bills on the table and I actually felt I was getting somewhere.
Just that moment Daniella came up to me and asked what I was doing. I said to her, “nothing Daniella, go and read your book”. She persisted and I got cross. I told her that it was adult stuff and nothing to concern her. I had really upset her.
Thinking back I was quite short with her and unfair. Lets face it, she was only being inquisitive. She saw that daddy was doing something important and wanted to get involved and help.
I can remember being really angry that I couldn’t sort this bill out and even more angry that I wasn’t being left alone to deal with it. Bills, debts, banking, savings, insurance, this was adult stuff and nothing to concern an 8 year old little girl who wouldn’t understand anyway.
Fast forward a couple of months and we were in a situation where we had very little money and even less food to last us for a week. We were in a complete mess. This was a situation that we couldn’t be in denial about, we couldn’t hide it from Daniella and couldn’t hope for it just to go away.
Instead of how I acted a few month before, I was open and honest with Daniella. I told her that we were struggling with money and that things were going to change. I told her that how we lived before is not how we are going to live in the future.
She looked at me and said, “OK Dad, just let me know if I can help”. She skipped off and I burst into tears. It was a mixture of emotions I was feeling. I was in pieces that we were in this situation, that we had let it get this bad but I could only think back to how I acted with her before.
I promised myself that from that point on, I would not keep my children in the dark about money and finances, and the taboos of the past would be non-existent.
I don’t want my children to make the same mistakes that I made. I want my children to have a good life and a good financial education. By being up front, honest and transparent I can give them the tools and the understanding so that they wouldn’t get into the same mess we were in at the very moment.
The next day we all sat down at the table and I explained my plan to them. I told Naomi and Daniella (Chloe was fast asleep) that we would start to sort out the bills and debts and than everyone had their role.
From that day forward, Daniella now helps with the household finances. It’s amazing how much she is learning. From showing her the bills that come through the door to setting up a direct debit, I get her involved in everything. Complete transparency.
What follows are a few of the things we do with her to get her involved and give her a good all round knowledge of money, where it comes from, how we use it, how to respect it and most of all breaking down the taboo of talking to your children about financial matters.
1. Dealing with debt
Now this is obviously a subject that you may not want to discuss with your children but I disagree. I have spent time with Daniella explaining, in simple terms, how we got to the situation in the first place. I then show her what we were doing to make it better.
I get her to enter figures on the spreadsheet so she can help track our progress and let her use online calculators to work out how long it will take to pay back certain debt. I also explain to her what debts are priority and implications of not paying.
It’s not that I want to scare her. She is not scared as she knows we are actively doing something about it and can control it. The bottom line is that she learns not to get into debt herself, and if she does not to run away from it and to deal with debt head on in a logical manner.
2. Household bills
I go through the bills with her and explain what they are for.
A good one is Council Tax. I show her the bill and how it is split between different services. We talk about the different things that the council tax is used for and what would happen if everyone stopped paying.
3. Open a child’s saving account
Daniella has a money box and will add loose change to it through the year. Any notes she is lucky to get for her birthday or as a special treat go into the bank. If it’s out of sight, it’s out of mind.
If she wants to buy something, we let her work out how much it will cost, and how much she has. She may then need to save, or earn more to be able to buy the item.
Daniella does chores around the house. We all do them, to chip in. For some bigger chores, we offer to pay/bribe her to help. She can then add the money to her collection, and make her that little bit closer to buying an item.
4. Helping with the food shop
When we do the food shop, we work out a meal plan and let D know what our budget is. She watches with a calculator as we add things to the trolley (online and she brings it with her for in store shopping too).
She starts to take off the money we’re spending and can quickly see our money being spent.
She is understanding why we don’t add a big bar of chocolate or a box of doughnuts as it impacts on buying food for the rest of the week.
5. Saving for a rainy day
We are teaching her the value of saving for a raining day and getting her to think about what happens if something in the house breaks. We would need cash but we can’t borrow any and if we did we would have to pay interest.
We put it into a context that she understands by saying that if a toy ran out of batteries, she doesn’t have enough pennies in her money box to replace them straight away. She needs to have money put aside in the bank to get the most annoying thing we ever got for her to make that racket again. Ok, maybe the batteries didn’t run out and I just took them out while she was sleeping but you get where I’m going with this.
Did you get brought up where it was taboo to talk about household finances?
I did and it’s impacted on me!
This has to stop. More financial education should be given at an early age to stop this happening to future generations, like the Money Saving Expert campaign that is sending teaching resources into schools.
When you learn to tie your shoes laces or ride a bike it is something that stays with you for life. This has to be the same for financial education. It needs to be that simple so that once children are taught the real value of money and spending, it will stay with them forever.
But, you know what they say? Education starts at home. So, why not have a look at Personal Finance Eduction Group who are the UK’s leading financial education charity for ideas to help with financial education at home.
Additionally, check out this wealth of information regarding children and savings from the Money Advice Service.
Ricky Willis is the original Skint Dad. A money-making enthusiast, father, and husband to Naomi. He is always looking for unique ways to earn a little extra.