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How to Teach The Middle School Child About Money

In General Budgeting, Teaching Children About Money by Phil McGilvrayLeave a Comment

In the previous blog post in the series, How to Teach Your Children How to Manage Their Money, I discussed some strategies for introducing your child to the world of money. This article will build on those time-proven principles and look at how parents can equip their children to make wise decisions about managing money and spending.

Despite parents’ best efforts to this point, once your children reach 8-9 years of age, they become more vulnerable to well-targeted advertising and peer group pressure. Unless a proactive approach is taken to combat these influences, all your hard work can be undone.

The Influence of Advertising on Children

By age 9 or 10, and sometimes earlier, children become more easily influenced by the power of advertising. They are aware of what they have, what is trendy and what they don’t have. It is not uncommon for children of this age to start to ask for things they see advertised. I remember as a child having my heart set on a Pacman electronic game. Everyone at school had one and they were the latest craze. For the purpose of this article, I will refer to the desired product as a Pacman.

How to Deal with Advertising

The best way to deal with advertising is to help your child think about the message that’s being portrayed. Sit down and watch the ad with them, then discuss what the attraction is, and whether or not the Pacman will live up to those expectations. In some cases it may be appropriate to do some research – go to the shops, have a look at the Pacman games and see if they look half as good as they do on TV.

Teaching Your Child Strategies For Purchasing

If, after this process, your child still has their heart set on a Pacman, discuss with them a strategy for buying one. This is now a wonderful opportunity to teach about saving money and delayed gratification  for their purchase. Depending on the value of the Pacman and the household budget, you may earmark the Pacman as a birthday or Christmas present or, alternatively, you could teach your child how to save money up for it. Should you choose the latter, I recommend drawing up a savings chart that helps your child visualise and anticipate the goal – the purchase of the Pacman.

Allowing Your Child to Make a Bad Purchase

Every now and then, it is important that you allow your child to make a bad purchase. We have all had times in our lives where we have been let down by a product we have bought; in many cases we have built the Pacman up in our minds to be much more than it really is. Within a couple of weeks of the purchase, we have realised our mistake and regretted the purchase. It is important that we allow our children to experience this and, where appropriate, discuss it with them. We can use this experience to help them make wise decisions next time around.

Understanding the Concept ‘Value of Money’

It is not until their mid-teens that children really have any concept of the value of money. A useful strategy to help your child gain some perspective is to equate each dollar with a task involving a reasonable amount of effort. For example, one of their ways to save money could be that for every barrow-load of leaves they rake up from your yard, you may offer to give your child one dollar. This will help them understand that money is a product of hard work and that they should think twice about how they spend it. It will also give them a way to value the items they want to purchase. Is a Pacman really worth 20 barrows of leaves? While we don’t expect them to rake leaves for every purchase, it provides them with a practical means for valuing their money.

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