Self-determined financial life

Advertorial: Children learn by observing and trying things out. When teaching children how to handle money responsibly, it is therefore important to give them room to practise, make mistakes and celebrate successes from an early age.

Handling their own money makes children realise the value of money. They realise that money is not an infinite resource and learn to manage their money, set priorities and work towards savings goals. In this way, children experience self-determination and a sense of responsibility.

Using bag money correctly

There are a few basic principles to bear in mind when introducing pocket money: When a child starts school, he or she is generally old enough to receive pocket money for the first time. This should be paid regularly, unsolicited and unconditionally. It is important that children are allowed to spend their pocket money on whatever they want. This also includes bad purchases. Reflecting on these together afterwards helps to learn from mistakes.

The amount of pocket money and the frequency with which it is paid out depends on age - experts recommend starting at the age of 6 with around CHF 1 per week. From the age of ten, the sack money can also be paid out monthly (guideline: CHF 25-30) so that children learn to budget their money over the longer term and work towards bigger goals.

In order to consciously guide children on the subject of pocket money, it makes sense to proactively discuss relevant topics relating to money management within the family: Where does our money come from? How long do we have to work for CHF 100? What do we need money for? Who considers which expenses to be sensible and why? These considerations support a reflective approach to money as a resource.

From spending on pleasure to covering the cost of living

The pocket money is a first step towards an independent financial life. Subsequently, it is also important to convey an understanding of future living costs. Open discussions about the costs of maintaining a family are a first starting point here.

Another way to give a child from the age of 12 a solid insight into general living costs is the youth wage. This is a fixed monthly amount that must be used to cover necessary expenses (e.g. clothes, bicycle repairs, mobile phones, hobbies) in addition to personal pleasure. In this way, children and young people are gradually given real-life skills and at the same time encouraged to take responsibility and become independent. They learn to plan for the longer term and to weigh up consumer wishes against necessary purchases.

Offices and holiday jobs add the work factor to the first steps towards an independent financial life. This creates an awareness of the fact that you (usually) have to work for money and young people also learn to better assess the relationship between labour input and the cost of living.

To summarise, by handling their own money, children and young people acquire the ability to set priorities and make conscious consumption decisions based on this, they learn to budget their money and gain a realistic assessment of the cost of living - all of which are fundamental skills for dealing responsibly with their own income later on.

Tips

How can your children get a feel for the costs of life? Start a family challenge! Each family member writes down all their expenses for a week. At the end of the week, the lists are then compared:

  • What are the living costs for a family (bills, food, etc.)?
  • Which things do people spend the most money on?
  • What differences are there between children and parents?

About the author:

Lena Gugenberger is an educator and financial literacy expert at Three Coins.

The Association of Swiss Cantonal Banks

The cantonal banks are committed to promoting general financial education. The focus is on FinanceMission, a joint initiative of the cantonal banks and teachers' associations to promote financial literacy in Swiss schools. In this way, the banking group is helping to combat youth debt and actively assuming social responsibility.

Further information can be found at www.kantonalbank.ch/finanzen-im-griff.

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