The summer season is in full swing – but that doesn’t mean learning has to stop! Whether you’re jetting off on an international adventure or hunkering down for a family staycation, there are plenty of ways to turn the summer break into a financial masterclass for your children.
Holidays offer plenty of chances to talk about everything from budgeting to money-saving goals. Our handy guide will help you make the most of every opportunity!
Summer Holiday Tip #1: Set a Savings Goal
One of the best ways to get your child ‘in tune’ with the holiday-budgeting process – so they understand everything that goes into planning and saving for a trip – is to set a savings goal as a family in the lead up to your vacation. Together, discuss ways you can save as much as possible for your trip (having family ‘fakeaway’ nights where you cook together instead of ordering a takeaway or going out, for example).
Help your child to set their own savings goals for their pocket money, too. After all, they’re likely to want to buy trinkets or souvenirs while you’re away – and they need to understand that the more they save now, the more they’ll be able to buy on holiday (and that you won’t bail them out if they run out of money during the trip!).
Summer Holiday Tip #2: Cash for Chores
Giving your child extra chances to earn money for the trip is a great way to introduce the idea of budgeting – and provides an excellent incentive to work hard and save up. This option also teaches children the importance of waiting to spend money, and of making sure they’re finding things they really want to spend their hard-earned cash on (as opposed to spending impulsively or frivolously).
Think of some seasonal chores they can undertake to earn holiday pocket money: from mowing the lawn to watering the plants to washing the windows (or even walking the dog early in the morning before it gets hot), there are lots of little tasks your child could take charge of. Their reward? A nice, full piggy bank to take on holiday!
Summer Holiday Tip #3: Explaining About Overseas Money
If you’re planning to go abroad, this is a fantastic opportunity to really broaden your child’s financial knowledge. Learning about foreign currency is a brilliant lesson that will provide lifelong benefits, as is a rudimentary grasp of exchange rates.
A great way to introduce this concept is to allow your child to manage small amounts of holiday cash on their own. Take them with you to exchange your cash for foreign currency, so they begin to understand how much they’ll get; then work out a daily budget (first in your native currency, then in the foreign currency), and talk through the different bills and coins this equates to. This not only helps them get used to the currency they’ll be using, but also the idea of planning and budgeting. Help them think about where their money might go each day: if they are keen on buying souvenirs, will they also have enough money to pay for that horse-ride on the beach? Setting limits early is a good idea - perhaps £5 a day to spend on souvenirs – whilst impressing on them that once they’ve spent all their cash, that’s it!
Summer Holiday Tip #4: Don’t Let Budgeting Become a Bore
Involving your children in the planning and budgeting process is essential – but if that idea seems too boring, they’ll soon switch off!
Rather than only focusing on costs and numbers, involve kids in the fun stuff, too. What sights should we visit? Pool or beach? What types of souvenirs shall we look out for? Are there any activities we particularly fancy? If we pay for one expensive pursuit, will we have enough money to do anything else? Opening up the conversation will increase their level of engagement and encourage them to listen to other opinions, which is a valuable (and not often practised) part of financial management: how to compromise and make decisions as a group, valuing a sense of teamwork, and how important it is to not only think about your own wants and needs.
Summer Holiday Tip #5: Be Firm but Fair
Finding a balance between indulging your children and teaching them valuable lessons can be difficult, particularly on holiday: after all, the main aim is for everyone to enjoy themselves! However, if your child keeps going over their allowance and you end up buying them additional treats they can’t afford on their own, will this undermine the financial lessons you’ve been teaching so far?
It’s important for your children to have fun; but it’s also important for them to learn that overspending does have consequences. Only you can decide where the balance should lie, but if you’ve set a daily spending limit and your child blows all their money quickly and can’t afford a treat later in the day – and then turns to you for help - don’t be afraid to be firm and stand your ground. Saying ‘no’ is still being fair, particularly in support of such a valuable learning experience!
