Tips for teaching kids about money

In our modern age where everything seems to be instant, it is important to teach your kids about money, how to earn it, how to save it and how to spend it….wisely!

Where Money Comes From

Your child may be forgiven for thinking that money comes from a machine in the wall or from a plastic card, but they are never too young to learn that you have to work to earn money.

Giving your child an allowance can be a great way to start the money conversation. Some parents choose to tie pocket money to chores to help emphasise the point that you must earn your money. For others chores are seen as helping out the family. But as the children grow I have found that it can be useful to tie certain extra chores (on top of normal ones ) to earnings as a motivator.

If you work outside the home maybe take your child to work one day. This might also help reinforce that it’s not some mysterious place you disappear to but that you have to do things while you are there in return for your salary.

Household Bills

As your child grows, it can be good for them to realise that bills come and have to be paid.

You don’t want to overwhelm or worry them but it is good for them to realise that things like electricity, gas, food and other items have to be budgeted for each month.

Budgeting

One of the greatest lessons you can teach your child is how to budget. This can be done simply by showing them how to decide on a set amount for shopping one week and getting them to help you stick to that amount.

Talk to them about how you plan your money, what needs to be paid each month and how you need to put money away for unforeseen bills or nice things like holidays.

Saving Money

Another great life lesson is how to save. If your child gets an allowance you should encourage them to have a saving portion and a spending portion.

Even if you can afford it, if your child wants something nice that costs more than their allowance, you should resist buying it for them and instead encourage them to save by working out how much of their allowance they need to save each week in order to afford the item.

Teaching them that instant gratification is not the way to happiness could help combat the ‘buy now, pay later’ mentality than can result in debt later on.

Need and Want

Life is about making choices so discuss with your child about choosing what to spend their money on and how to save for things instead of spending right away and regretting it later.

Teach them to understand the difference between an item they need and one they want. You could have a one in one out rule and give items to charity to help re-enforce this message.

Teaching Kids about money really is a gift for life. For more parenting tips, visit www.mykidstime.com

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