What was the first lesson you learnt about money? Who did you learn it from?
What we learn about money as children and the habits we build around spending can stay with us well into our adult years. According to research by MoneyHelper, children’s attitudes towards money starts forming by the age of seven. Helping kids understand money and getting them money smart is a vital life skill and as Lloyds Bank emphasises, “It’s never too early for your children to learn about money…So it’s important to start good money habits as early as possible.”
Money is one of those things that affects our life, regardless of whether we actively think about it or not. That’s why Amaliah has partnered with Lloyds Bank to bring you a series of articles and information to help you feel better equipped for the big and small financial decisions in life. We haven’t forgotten about kids too because helping them understand spending and saving at a young age will put them on the right track to making good financial decisions as adults and the practical tips and guidance from Lloyds Bank will help you feel more confident educating your child about money.
You can read the rest of the articles in the series here:
Teaching children how to have a healthy relationship with money starts with parents first reflecting on what they have learnt or may even need to unlearn.
To help parents on this journey, we came up with SIDES (Spend – Invest – Donate – Earn – Save), a framework to teach kids (and ourselves) about money.
Spending may often be a child’s first interaction with money, especially if they are present when a parent or elder is out and about shopping. A family shopping trip is always a fun and practical place to start. Setting them a small budget when going out to help them with decision making, getting them involved in comparing different prices and even giving them an opportunity to handle money and pay for the shopping at the end will all contribute to helping them understand what’s involved when it comes to spending money.
Lloyds Bank’s Top Tips on Educating Your Child about Spending Money
With young children, whilst they may not grasp ISAs or shares and stocks, using language that is age-appropriate and continuing to expose them to such topics and in turn options, will familiarise them and upskill them when it comes to managing their money.
Investing also doesn’t have to just be through the lens of financial investments. Helping your child to understand the concept of investing in their akhira (spiritual life) through spending, donating and saving is a great way to have a holistic approach to money.
“The example of those who spend their wealth in the cause of Allah is that of a grain that sprouts into seven ears, each bearing one hundred grains. And Allah multiplies ˹the reward even more˺ to whoever He wills. For Allah is All-Bountiful, All-Knowing.” [Qur’an 2:261]
Giving them examples from their own purchases on how something may be seen as a ‘good investment’ in the long term and will help them to save money can also get them into the habit of thinking about the importance of the financial decisions they make. Telling them stories like that of The Little Hen about the tale of a hen who invested a lot of time and effort over the long-term to turn wheat into bread or playing games like Monopoly can really help them to visualise this concept.
Lloyds Bank’s Top Tips on Educating Your Child about Money
Helping children understand the tenets of faith through money can be easily done through teaching them the concept of charity, donating and Sadaqah. The word Sadaqah is derived from the Arabic word Sidq (truth). All actions of righteousness in Islam is considered as Sadaqah. Teaching children about Sadaqah allows us to nurture our children’s relationships with money from the lenses of Islam and rooted in having barakah (blessing) in our wealth through how we manage it.
When children receive money, in the form of gifts, Eid money etc., talk to them about their options and if they would like to consider donating some or having a separate physical saving pot for donations.
Helping children build consistent good habits including giving to charity is a lesson that can serve them well into their life and across all areas. Building a habit around a specific day like Jummah (Friday prayers) is a great opportunity to build the habit of giving Sadaqah and helping the community.
“The most beloved of deeds to Allah are those that are most consistent, even if they are small.” (Bukhari).
If as a parent you are eligible to pay Zakat, explain the practice and how your money is recirculating to help not only those who receive the Zakat, but also how it is spiritually nourishing and purifying for the giver.
Ramadan is also a good time to build habits or pick a cause to raise money for. Involving your children in these practices will help them to understand the language around goals, targets and timelines.
Helping your children understand money holistically will help to ensure they have a healthy approach to money. When it comes to earning money a good place to start is by helping your child understand the concept of earning money along with a reminder about ensuring your money is earned from a halal source.
In an ever-changing world, helping your child understand the diversity of ways in which people earn money can help broaden their own horizons. Using real-life examples e.g. explaining what a friend does for a living or how the corner shop is run as a business will help them get a grasp of different ways to earn.
It is also important in this conversation that they recognise that ultimately all forms of provision including money, come from Allah!
Lloyds Bank’s Top Tips on Educating Your Child about Earning Money
Giving a child responsibility over things such as saving and spending can help your child build a sense of value for money and give them an understanding of patience and planning. It may be that they want to purchase a significant item or it may be that they want to save to do a special activity or even donate to a cause, helping them understand how they can work towards this goal will help your child understand the concept of saving and give them a sense of satisfaction when they reach their goal!
If your child gets pocket money, helping them calculate how long it will take to save their desired amount against this will help them stay motivated.
Lloyds Bank’s Top Tips on Educating Your Child about Saving Money
*This article has been created in partnership with Lloyds Bank. Every now and then we partner with companies to bring you sponsored content. We always strive to ensure we maintain the same editorial integrity that keeps you engaged in our non-sponsored content. We thank you for your support.
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