Teaching children about money is an important part of preparing them for a successful future. When your child is a toddler, of school age or a teenager, they can and should understand the basics of money management. Here are a few tips for parents and guardians on how to get started:
1. Set an example
Those little eyes are watching you, so it’s important to remember that children will form money habits early on in life. If you’re not in control of your finances and stressed out about this, your children are likely to notice. If you spend too freely after payday and don’t have anything left at the end of the month, your children will grow up thinking that is the way things are done.
Rather teach your children to have a healthy attitude towards money and talk to them about the financial decisions you make, especially the ones that affect them. For example, if they want to go out for pizza, explain how much it will cost and the implications of that cost on your family budget going forward.
2. Link pocket money with chores
Teach your children the value of money by encouraging them to earn their pocket money rather than just giving it to them for nothing. Pocket money teaches independence when it’s linked to achieving a goal. It may also help prepare them for their future career – they will be able to apply more understanding to how they manage the money that they earn.
3. Avoid impulse buys
If your child sees something they want, rather than just buying it for them straightaway, explain that it’s a good idea to wait a day or two before deciding whether or not it’s a worthwhile thing to have. Plus if they have to spend their own pocket money on it, they will certainly think harder about the purchase.
4. Show them the importance of giving
Saving and spending is all very well, but children will learn the importance of charitable giving from your example, whether it’s donating to a charity shop rather than throwing things away, or splitting their pocket money between ‘spend’, ‘save’ and ‘give’ jars. This small lifestyle change will teach them that the benefit of giving is not just felt by the person who receives, but the person who gives as well.
5. Teach them to set money goals
Do they have their eye on those latest sneakers or cool gadget? Instead of promising whatever it is they want to them for their birthday, for example, encourage them to set a goal of a certain amount of money to work towards. Then, if they reach that goal, you can pay the rest. The level of satisfaction and enjoyment they will get from that product if they’ve spent their own money on it will stay with them for many years to come.
The information contained in this article is for information purposes only and does not constitute professional advice.
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