Giving your child a good financial education is one of the most important jobs parents can undertake. Research shows that our habits and attitudes towards spending and saving are ingrained at a very early age. The decision to blow all the birthday money in the piggy bank on sweets and toys may seem harmless in a child, but those same behaviours are much more damaging when translated into adult spending patterns.Helping our kids to become money smart from an early age is incredibly important – but it doesn’t have to be daunting. Some simple steps to make money part of the everyday conversation are all it really takes.
Talk About Wants Vs Needs
Savings can seem a little abstract to most adults, let alone children – and it may be that you struggle to make smarter money choices on a daily basis yourself sometimes. Start off by staying calm and discussing with your children what money needs to be spent on and why. Show them the difference between things you need and have to spend money on, and the disposable income you have which you can choose to spend on things you want – or to save. You could take them through a simplified budget where you explain how money earnt and coming into the household needs to be divided between different costs. Take a lighthearted, game like approach to this and make it tangible. Involve kids in your financial decision making – whether it’s taking them around the supermarket and teaching about choices or even making a big ticket purchase, such as purchasing a car from Chrender. Too often we shield kids completely from everything to do with money, but it’s a much better idea to involve them in a way they can understand.
Give Them A Chance To Earn
We can’t value what we don’t earn, and so giving kids a chance to exchange their skills for money is essential to help teach them about value.Work out an age-appropriate chore schedule and allow them to do additional jobs to earn some extra pocket money. This gives them the chance to learn how to use their own independent income. Provide them with the opportunity to save, but know that it’s crucial to let them make their own choices. If they have something big in mind that they’d like to buy, then you could try helping them draw up a savings chart showing the total that they need to save, with progress increments so that they can visualise where their money is going.Help them to work out how long it will take them to reach their goal depending on what they save – this same tactic can also be helpful for adults who have a hard time keeping on track with their plan!
Help Them Track Their SpendsKeeping track of money going in and out is an essential part of keeping to a personal budget as an adult, so help your kids to set up a system which works for them, so they are more aware of where exactly their money is going,Have them keep a record in a notebook of any purchases and the balance they have left to get them to question their own choices more and learn to spend mindfully. Encourage them to think about what they are choosing to spend their money on and talk about how much faster they could hit a savings target if they make changes to their spending.
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- 14th October 2019