From savings bank to your own account: This is how children learn how to manage money

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Their curiosity allows children to explore and experience things in a fun way. They learn how something works by observing. The same goes for dealing with money. You see adults paying money at the bakery and getting bread in return. They then play the role of sellers themselves and exchange the game money for goods.

They understood the principle. However, children first need to learn the value of shiny silver coins and colorful banknotes. This is also the reason why the money stays in the safe and is not spent immediately. Parents are needed here. According to Swiss pocket money research, financial education is the responsibility of the parents of nine out of ten people surveyed. The school stayed here for once. Here are tips to make dealing with money a breeze.

You don’t talk about money. This is a saying in Switzerland. This is especially important in children. This is the only way they can find out where the money comes from. Why do mom and dad go to work? Why are they getting paid for this? Why does a family need money? How to get banknotes from ATM? Where is the money actually in the plastic card? Kids have lots of questions and they deserve kid-friendly answers. For this reason, money and its equivalent value need to be explained and concretized. For example, when shopping together, the prices of products are consciously discussed.

Children learn the principle of sharing from an early age. Even though it’s not fun most of the time to give away half the candy or not get the whole toy for yourself. It’s no different when it comes to money: The Swiss Budget Advisory Service recommends that Christmas money or pocket money should be divided. For example, a portion is saved for a larger wish. The child can spend some of this. This means you will learn how to handle money correctly from the very beginning. By the time young people meet their first financial obligations at the latest, they are forced to use their income primarily to cover fixed expenses.

Children, who have complete freedom to use their money, also save voluntarily. About half set aside most of their pocket money, according to a 2017 survey. According to the pocket money survey, this means that children aged 7-8 save an average of 650 francs. Of course, this is due not only to pocket money, but above all to monetary gifts.

Most children have a piggy bank, piggy bank, or money box. It makes a funny sound when you insert the coin. When you unload everything, it’s fun to marvel at the pile of cash. The best thing to do is to teach kids to divide their money into different funds. These can be painted cups, boxes or several piggy banks. It’s about learning the principle of division (division).

At some point the pot will be filled with money. Then what? The account is closed. Two out of every three people living in Switzerland have a savings account. This is especially attractive for children. Account management there is free and the balance increases thanks to interest. This has a huge impact on small savers. Additionally, savings can be used in different ways. A savings account offers even better interest rates.

A fiver is a large coin. But what can I buy with it? Let your child pay for himself at the store. So you get an idea of ​​how much the delicious Grittibänz costs, for example. Saving to fulfill a wish also helps you understand the value of money. It’s something that will become increasingly important as you get older and want more.

It’s an undisputed fact for most parents and experts: Children learn to manage their money through regular allowances. How much pocket money will be depends on the family budget. The budget consultancy service has clear advice on this matter. From age 6 – or from grade 1 – 1 franc per week. Nine-year-olds would therefore receive 4 francs a week. It is recommended that the allowance be paid monthly from the age of ten (see text box below).

Exciting: Even if these are “small” amounts, some of them are saved without parental instruction, as the pocket money survey shows. Mostly without a specific savings goal or mostly for the purchase of electronic devices or transportation equipment such as inline skates or BMX bikes. It is also interesting that girls receive their allowance a little later than boys. The difference is largest among children ages 5 to 7. 43 percent of boys and only 28 percent of girls have money. The difference decreases with age, and there is no gender difference in the amounts. The research reveals another difference between the country’s regions: In French-speaking Switzerland, parents pay their allowance later than in German-speaking Switzerland.

Should you reward good grades with a gift? It’s up to the parents. What you shouldn’t do is make your pocket money dependent on benefits. This creates deterrence and frustration. Additionally, pocket money belongs to children and they should be able to manage it themselves. According to the pocket money survey, 63 percent of legal guardians give pocket money unconditionally, and 37 percent tie it to the performance of an official duty.

It’s part of the learning process that not everything works right away. When it comes to money, you must learn that not everything can be financed right away. Only those with money can afford things. This is hard, but paying off debt is even harder.

Source : Blick