Tuesday, 28 May 2013

8 ways to encourage children to be frugal

One of the things that are important to me as a parenting is encouraging my children to live a frugal life and this means teaching them good money management skills.

We do this in various ways, but for me and my children I find practical examples have the biggest impact.  

Both the boys get £2 a week pocket money of us and they are allowed to spend this how they chose, however, once it is gone, it is gone. They also get money off their nana and grandad on a pretty regular basis and for birthdays too.



  1. Spontaneity doesn't pay - Sometimes when the boys hear the sound of the ice cream van they are keen to get an icecream or lolly.  But they have learned that their money doesn't go far with the van, especially during the holidays when he is here on a regular basis.  However, I encourage them to buy (or ask me to buy) value cones, ice cream and ice lollies  or even better make their own) on my weekly shop and they pay me rather than the icecream man.  
  2. Buying in bulk can save money - There is a real trend for Trash Packs and a lot of their friends get their pocket money and go to the local shop and buy one, but the boys have learned pretty quickly that they can buy more less expensively if they save up their money and but the larger packs from a shop.
  3. Look for offers - Back to trashies again.  They are £2.50 for one at the local shore or 12 for £10 from Argos, however, you can get two 12 packs for £15 from Argos.  So they now look for offers,.
  4. Pooling Money - The boys often want the same things, so they have learned to club together and share what they buy.
  5. Exchanging (money Back) - They have also learned that you can take used games back in exchange for money off new ones.
  6. Buy Secondhand - Again, they also know that second hand is not second best and they can get more for their money this way and love going to boot sales.
  7. Make money from selling  - they sell their unwanted toys online or at boot sales (with me).
  8. They also ask for a subscription to a magazine rather than buy them weekly or monthly.  
Our next money management lesson is going to be in saving and savings rates and both the boys have their own savings account.  I have wrote about encouraging children to save over a Mum in the Mad House as we want the boys to understand about pensions and saving for their futures.  Having a pension such as SIPP pension investments is such an important aspect of money management. 


24 comments:

  1. I have to start thinking about teaching mine a little more on the value of money, sometimes they seem to think it grows on trees! They are still young but it's never too young to learn

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    1. Before we used "real money" we had a points system. You can read more about it here http://www.muminthemadhouse.com/2009/08/17/praise-punnishment-rewards-and-consequence/

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  2. We have those moneyboxes that count the money as it goes in so you can see exactly how much is in there which really motivates my two. THey only cost about £3 on eBay aswell x x

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    1. What a fab idea. The boys also have a penny pot that they use to put in any copper they find, they are really diligent at looking on the floor!

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  3. Your ideas are great. my kids also love car boot sales and pool their money occasionally. Waititng they find tough though!

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    1. Yes, I agree waiting can be taught, but there are ways my two can top up their money (I must blog about that now)!

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  4. I think there are some really excellent suggestions there. My nephew has a thing for new trainers but he is not allowed to have them until his old ones wear out or get too small. He is encouraged to save towards them, do jobs for payment or trade in old games that he no longer plays too. I think it really teaches them the value of money. Mine are a little small to understand yet but my son thinks that the charity shop near our house is the 'jigsaw shop' as that's where we buy most of our puzzles from.

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    1. Oh that comment made me chuckle as the boys always used to call the charity shop the Jigsaw shop too when they were little!

      My boys too have ways that they can earn more money if they want to. I am all for encouraging good money management skills for the earliest age possible

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  5. I'm with you on most of them. I think children have to learn the value of money and finding out how far it goes is one of the main points. I teach mine to look for bargains and multibuy deals that they can split with their siblings and it doesn't take very long before they realise it's definitely the best way to go about spending your hard eared pocket money :)

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    1. I agree, learning the value of money is really important, as is teaching children that a bargain is something they need not want!

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  6. We have started to use the MoneySmarter book - it's got some great learning tools and Grace has found it really interesting.

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    1. Off to look up that book on Amazon now!

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  7. I agree, it is so important to teach children the value of money. However, with my two, I am having trouble getting started. They both, particularly the two year old, think they can have anything. With Sonny (2yo), I genuinely think he just has no concept of earning or paying for a reward/product. With Jasmine (4yo), I think she is starting to realise that things do cost money, but she is very good at playing me. Must implement some of these ideas asap!

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    1. Jen, you may find this post helpful. http://www.muminthemadhouse.com/2009/08/17/praise-punnishment-rewards-and-consequence/ It is what we used to do before we used "real money"

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  8. Wow, I am impressed at how well you're teaching your boys to value money and to realise its worth. I especially like that you're teaching them about how to be frugal. What age do you think is a good age to introduce pocket money?

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    1. We started with real money at around 5, before that we did this http://www.muminthemadhouse.com/2009/08/17/praise-punnishment-rewards-and-consequence/

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  9. I totally agree with all of these. I'm really getting into planning our shopping - meal and treat planning for the month saves us a small fortune!

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    1. I think that teaching these skills to our children by setting an good example is a brilliant way forward

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  10. Some great suggestions here. My son is nearly 5, so I'm going to start doing most of the things you suggest.

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    1. Good to know, I am also open to any other ideas you may have too

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  11. My son is starting to learn about money - he's just turned 6. We're currently a bit mean on the pocket money front: he gets 20p a week, but he always seems to be sitting on loads of money from birthday and Christmas. We have bought toys that he likes off ebay a lot cheaper than buying new. He understands that he gets more for his money this way.

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  12. My eldest daughter is obsessed with money and how much she has in her savings account ..... although I think it is more about how much she has to spend! (like mother like daughter!)

    She has pocket money but doesn't earn much from doing jobs!!

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  13. Interesting post. Our girls don't get pocket money and we don't buy them lots of little xtra's. They can earn little rewards if they work particularly hard. At the moment they get to lucky dip a moshi monster from a large bag full that I bought off another mum. Any birthday/Christmas money they get they have to save half and can spend the other half on anything they like.

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  14. Some great ideas there that I am going to start using partic magazine subs and ice cream. Both my kids love the charity shop! My eldest is 6 and generally gets money from relatives for doing well at school or sports. He saves it but still looks to me when it comes to buying things (saying he will pay me back which he never does!) so I need to start reinforcing the value of money.

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