Teaching children the value of money

My husband and I would like our kids to learn about the value of money. My eldest son is 12 years old and there is a great deal of peer pressure on him from his school mates to have a mobile phone, the latest computer games, designer clothing etc. Can you provide any tips on how we can teach our kids to manage money effectively?

Your first task is to teach your children that money simply doesn't grow on trees. Children are under great pressure to be seen wearing the "right" clothing for example, or to carry a mobile phone. However you can use this peer pressure to your advantage because it's a great opportunity to encourage your kids to plan budgets and teach them how to manage their finances carefully.

Following are some tips to help your kids learn about managing their money:
•  Ask them to think about what they want and need, and point out that there is a big difference between wants and needs.

•  Prioritise their wants and needs by assigning a number next to each goal. (1= most important etc…). Also write down the cost of each item.

•  If you provide them with weekly pocket money encourage them to put aside a weekly amount to help reach their goals.

•  If you allow your kids to use a mobile phone then use pre-paid cards and remind them that once the credit runs out they will have to use their pocket money to pay for more calls.

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