It’s never too soon to educate your kids about finances since money can appear almost invisible to them. Online banking, shopping online and card payments frequently mean children seldom see real money. When they do, it usually comes from an ATM which can cause them to think that money is always available.
- Make Saving Fun in Early Stages.
Giving your children pocket money from around age three might help teach them the value of money, particularly if you teach them to save towards something they want. A great way of encouraging saving at all ages is to give them a break, by either matching their savings to buy the item they saved for or by making a small contribution towards it. When they purchase something with pocket money or birthday money, they know what they’re getting for their money and will value the item more.
- Talk to your Children About Money.
Telling them how you earn money and how you spend it is an excellent life skill to teach your child at any age, and helping with shopping is a superb start. By age 10, your child needs to be able to go into a store, purchase an item and know exactly how to count money and also the change they ought to receive. Share with them the cost of essential things like bread, milk, utility bills, etc.
- Teach Children How to Budget.
To do this, you’ll need to provide your kids with pocket money.
When they are at an appropriate age, let them write down how much money they have and what they spend it on. It will teach kids the basics of budgeting. Expect to have some exciting times when they spend all their money immediately and then start asking for more. Agree on an amount from the outset and stick with it. As they get older be prepared to provide the occasional loan that must be paid back on an agreed date.
- Help your Teenager Find their First Job.
Teenagers often embrace their first job with such innocent enthusiasm. It’s often heartbreaking to see their good cheer melt off because they are confronted with less than minimum wage salaries, long hours and angry customers. This, however, is the time to encourage them not to give up as they will most definitely learn the value of money this way. It’s also wise to not try and control how they spend their hard earned cash. They worked for their earnings and should be allowed to spend it how they see fit. You can simply advise them to make better financial choices but don’t expect them to agree.
- Include your Children in the Family Finances.
As opposed to just saying “We can’t afford it”, explain why. Speak to your kids about all of the different things you have to pay for, like tax and insurance, together with mortgage/rent, water and electricity, phone, the internet and also groceries.
I won’t always be easy, and it will take some time but if you want to teach your children how to successfully manage their money when they get older, following these guidelines will be worth it.