07 Oct Teach Your Children About Money
Teaching children good money habits while they are still young can help them to develop the discipline needed to work well with their money when they grow up. As parents and caregivers, we want to ensure that our children have the best possible opportunities for financial stability in their futures, and learning to save money is a big contributing factor. You can start instilling lessons on how to deal with money by the age of 7, starting with what money is, how it’s used and how it works.
Lead By Example
One important fact is that you are setting an example to your little ones every day, through your own financial decisions and actions. Children learn by following their parent’s lead, and are likely to grow up with a similar relationship to money that their parents demonstrated at home, through behaviours like spending, saving and working to earn an income. Help your child by keeping an open line of communication about how you work with your money. Show them how to draw up a budget, prioritize expenses, save and spend.
Start with a Piggy Bank
Make it fun for your child by letting them save their money in their own piggy bank, towards an item they can’t yet afford to purchase. Rewarding chores with pocket money can help your child understand the correlation between working and earning a salary. Give your child the change to earn their own pocket money and guide them as they learn about wants vs needs when it comes to the way they spend their money.
Saving teaches patience and it is worth it when they can afford the item they saved towards! Another option is to use their piggy bank savings to open up a bank account for them – show them how much they have saved, take them along to the bank, and explain how their money will grow through interest, as long as they leave it in the bank.
Teach Kids to Spend Smart
One important way for children to learn about smart spending is through a budget. For younger children, a more visual approach, like dividing money into jars with the appropriate labels, is an option. Once children understand that there is value in money, whether they give, save, or spend it, they will be able to make choices about where their money goes, and can set financial goals.
Educate your child about Money
The better your child understands the fundamentals of money, as in where it came from, how it is earned, and what it can do, the easier it becomes for them to learn good money habits. Money does not grow on trees and does not simply appear when we ask mom and dad – this may seem obvious to us, but to young kids it needs to be learnt and takes time to understand. There is a relationship that exists between working and getting paid, and if you don’t work, you do not earn money.
Make an impact on your child’s life while are they are still young enough for it to stick. Teaching your kid how to save, spend and give when it comes to finances is an invaluable lesson that will all the difference in their lives.