Here are some tips to help your child make sensible spending decisions:
1. Avoid impulse purchases
Children often learn from first-hand experiences. So after they’ve made an impulse buy, explain how they could make a better choice in the future. Using their recent experience, explain how they could have got more for their money. Encourage your child to shop around and think carefully before they buy.
Setting a savings goal is a great way to minimise impulse buys, since it keeps your child focused on their wish list. Once they’ve saved enough, help them compare prices so they get more for their savings.
2. Get value for money
It’s important to show your child that similar products can come in a range of prices. If an item is more expensive, your child may assume that means it's better, so explain why prices vary and that sometimes it can actually be more sensible to go with the cheaper option.
Your child may be drawn to a particular brand, but if you show them that a cheaper ‘no name’ brand achieves a similar result and leaves them with money in their pocket, you may help them become a savvy spender.
3. Money can run out
Sometimes, the best lessons in life are learnt the hard way. If you allow your child to spend their pocket money how they want and they spend it too quickly, you’ll have a real-life example of the consequences of poor spending decisions. Be sure to chat them through what they did wrong, while giving them practical advice on ways they can save money and spend wisely next time.
As your child's role model, it's a good idea to think about your own spending habits too. Think about how your approach to money management is influencing your child.