COMMUNION CARDS, CHRISTMAS gifts, birthday money… If you have a young kid at home, you’re probably well aware that special occasions can often come with cash windfalls from relatives and friends.

It’s a lucky situation to be in, but it can be a tricky one for parents to manage, especially if your child is keen to spend all their new riches at once.

But what’s the best way to approach what can often be a complex topic?

To help you start an honest conversation about money with your child about a potential windfall, we spoke to clinical child and family psychologist David Coleman to hear his expert advice. 

Firstly, David recommends waiting until your child has received money to start a conversation with them about managing it. “With young children, you need to wait until they actually begin to get the money to have the conversation,” he says. “Children in the seven, eight or nine year old age group, they don’t really have the same capacity to conceptualise things as teenagers will have.

“So they actually need to have the money in the concrete ways. They’ll either see it in terms of notes falling out of cards, or they’ll be aware of money being transferred in if you’re using something like An Post Money Mate, where they’re able to see their balance increasing. When they get the money, that’s when you begin to talk about what it means and you can say, ‘That’s €20. What do you think you could get with €20?’

The conversations are all about trying to apply something very concrete in the real world to what that money means for a young child.

Explore how much things cost together

Using communions as an example, David says it’s important that you let your child know you’ll be helping them manage the money they receive. “I think it’s fine as a parent to say, ‘We’re going to help you manage this money. It’s a lot of money, and we’re not going to let you spend it all on penny sweets in the corner shop.’

You might decide that you’re going to give them 10% of what they’ve been given to spend in the here and now as an immediate gratification.

“If there’s a particular toy that they’ve been looking for or something like that, work out together how much it is. Say they want a bike, for example. Go into the shop, look at the different types of bikes, look at the amount they cost.”

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Doing this allows the child to learn to associate what the money they have means, says David, “It’s helping children understand the value. They need to learn what the money allows them to get.” Plus, if they need more money to buy what’s on their wish list, the Jars function with An Post Money Mate Jars allows your child to put money aside and watch their savings grow – and you can keep tabs on it too.

Another way to do this is by including your child in the thought process behind the decisions you yourself make, like when doing the food shop. “Bring them through how much money you’re spending and the different choices you make between different brands, like why you would buy an own brand product compared to a more expensive branded product if you think that the products are essentially the same.”

Use real-life experiences as learning opportunities

When it comes to teaching a child the importance of saving some of the money they’ve received, again, David recommends using a real-life experience they can relate to. “I think it’s hard with young children to have this idea of saving for a rainy day,” he says.

“As adults we might have to consider saving for a rainy day, but with children it’s much, much more difficult. Some of that, though, is to do with the fact that they don’t have this concept of what that money might be used for. So I think if you can apply it to a hobby or an extracurricular activity that your child does, that can be really helpful. 

“I think it’s much easier to talk with children when it comes to saving when they have a specific target or specific goal for what they’re saving for.” 

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Don’t be afraid to let them make mistakes

Similarly, David says it’s also important to allow your child to make small mistakes when it comes to spending their money. “I think, for children to learn anything, they have to experience the consequences of their choices and their decisions. If we keep protecting them from that because we give them money when they’re stuck or whatever, they don’t necessarily learn to be responsible with their money because it will seem to them like there’s a never-ending supply. So sometimes it’s good for them to experience money not being there. I’ve long been an advocate of never lending your children money.”

Having these conversations from early on will help your child have a sense of what money is worth as they enter their teenage years and ultimately want more control over what they do with their money, says David.

“Hopefully you’ll have had these kind of conversations all the way along, so when they hit their teenage years they’ll have a sense of money and what it’s worth. I’d be really slow to keep handing teenagers money. You want to give them actual responsibility for finding the money they need.

“If they do have access to their own money, again, I think you have to let them make mistakes with some of that money, rather than micromanaging and always controlling what they do, because then they learn.”

An Post Money Mate is the new account available for children aged 7 years to 15 years and six months. With An Post Money Mate, your children learn how to earn, save and spend money with their own debit Mastercard and app. They get independence, you retain control. Download the brand new An Post Money app to get started.

T&Cs apply. The An Post Money Mate Debit Mastercard is issued by An Post. Mastercard is a registered trademark. A monthly maintenance fee applies. An Post is authorised by the Minister for Finance to provide payment services and is regulated by the Central Bank of Ireland in the provision of such services.