Liam Croke: give kids some credit and open their eyes

Never, I repeat never, let your child know, what your iTunes password or any other password for that matter, if when it is used will take payments from either your laser or visa card.

Never, I repeat never, let your child know, what your iTunes password or any other password for that matter, if when it is used will take payments from either your laser or visa card.

I made this mistake and found out to my detriment over last weekend. You see my youngest, Sarah, who is 6 years old, loves playing games on my IPad. She loves downloading free cooking and fashion games and you think they are free and they are to a point, but sometimes we have now discovered, that if you want to move to different levels you have to “buy” coins or if you want to decorate your virtual cake in a certain way, you have to buy the decorations.

Well boy did my Sarah do some decorating. When I was checking my emails last Saturday night I noticed a receipt from iTunes and ordinarily I never go into them but for some reason I did and saw this confirmation for €4.49 for you’ll never guess what...unlocking candy maker marshmallows.

The little monkey I thought, but it’s only a fiver that is until I noticed another email, then another and another and another. To cut a long story short and about 12 emails later, she had racked up €150 over a two day spending spree.

I really do think that these games are designed with the six-year-old in mind who with or without their parent’s consent, are tempted into buying things when they have no idea what they are doing or have any idea of the cost.

Anyway, Roseann, my wife spoke to her about it and said she had received her visa bill and it seemed that someone in the house was buying things on the iPad.

Sarah’s reaction was priceless – well I didn’t buy anything, no, not me. We obviously didn’t accuse her of anything but wanted to talk about not buying anything or pressing buttons that she wasn’t sure about. She said OK, was still in denial but finished by asking Roseann “is it real money?”

And isn’t this a problem that kids and parents now face? Because if there is no physical exchange of money, it seems like it isn’t real to them and money subsequently has no value.

It is very important therefore in my opinion that children like Sarah, need to be taught about money right now and it begins at home. So, I am now going to give you some tips that you might find useful.

The first is teaching them the four uses of money which is spending, saving, giving and putting money away for something in the future.

This will help them learn other values such as charity and the need to prepare for the future. A good rule of thumb for allocating money in these categories is: 10% for saving, 10% for giving, 10% for saving for something in the future, 70% spending

The second thing to teach them is that if they want to buy something special and it’s costly then set up a simple target chart where for example each week you mark an X off a chart which denotes a euro.

Have this on the fridge so that each week your child will see more and more X’s until the chart is full; they now have enough money to buy their doll or car or whatever and they will appreciate it much more.

The importance of doing this is twofold. First you are getting your child into a savings routine and secondly you are not spending a fortune on toys each and every week, you are also saving money. This is not being mean, it is just getting your child used to value of money which will help them when as they grow up and it is helping you along the way with managing your money better.

Also, I would encourage you to get your child involved when in comes to paying bills, this may sound an absurd thing for you to do but trust me it is a great exercise.

Tell them what they are for and why they have to be paid. Bring them with you to the bank or post office when you have to pay something and tell them why you are going there and what you are paying. Always finish on a high - a “job well done” and maybe a “high five”.

This will reinforce the notion that certain bills have to be paid and it is a good thing to pay them, on time if possible. Remember your child will imitate, watch and observe you and their values and attitudes to things such as money will be shaped by you.

I would also suggest that you speak about borrowing money. So, borrowing books from the library, for example is a form of credit in that if they don’t bring back the books on time or not at all then you or they will have to pay for them.

This will encourage them to read more and also that books don’t have to be bought every week, they can be “loaned” from the library BUT they have to be given back on time or there are consequences.

Let them borrow a small amount of money from you as well if they need money to buy something in town because they left their money at home. But make sure they pay you back and again it has nothing to do with the money, it is about instilling good habits and giving your kids an appreciation that money borrowed has to be repaid.

And if you are out for dinner or just grocery shopping and you pay the bill from your credit card, use this opportunity to show them the bill and explain that just because physical money was not used does not mean the items bought were for free.

Explain that you will have to pay for this later and this card is not magical.

My friend has a daughter aged 12 who told me that she could not wait until she grew up so that she could get a card like her Mum’s because she could then buy anything she wanted with it.

This kid thought that a credit card was incredible and could use it to buy what she liked when she liked. Her mum never explained to her that when it is used it has to be repaid – don’t have your child fall into this trap.

And whatever you do - don’t let them know what your passwords are!