Friday, 28 October 2011

Teaching children about money

I've just ordered a book  to teach about money and finance in a more formal way but ordering this book reminded me of the informal way that we have used to teach Middle Son, aged 11, about finance.

We told Middle Son to imagine that he was 18 and working 35 hours a week in a Minimum Wage job. He would therefore earn £4.98 per hour. (UK minimum wage for 18-21 year olds).

His task was to work out his total earnings per week and produce a budget. We didn't allow for the possibility of debt-the budget had to balance.

So he set to and worked out a menu which he costed using an on line supermarket. He looked at the cost of rented accommodation, clothing, leisure and travel.

Not surprisingly, it was difficult to get the budget to balance.

This project led to useful discussions about
  • giving and tithing
  • priorities in budgeting
  • renting vs buying
  • mortgages and how they work
  • saving
  • how to cut expenses
  • living alone vs living with parents or sharing
  • where to buy food
  • how to earn more
  • the value of study to increase long term earnings
Of course, this can be extended on and on but it was a useful exercise which took several hours of work over three days to complete.

Please do comment about how you teach your children about finance.


  1. Very interesting! If he was over 18 and without work, he would get help towards his housing costs (if he didn't live at home); which might in London make it better to not work. (Which is a disaster in so many ways)

  2. True-we didn't want to go down that route! This caused a fair amount of discussion and we took the "If you work hard and study you are likely to get a better job" line. Probably, not completely the case in this economic climate but I like to hope.

  3. Very interesting ideas, thanks Sarah!