Your children have no doubt noticed the disruption in the world, and maybe your family’s financial concerns as a result. We all grow up with different attitudes to money, much of it down to how we’re raised and the principles our parents taught us. Here’s a great opportunity to impart some wisdom that’ll set your children up with sound principles, and empower their decision-making on money matters throughout their lives.
Our top three tips to teach your child about money.
Saving starts young.
Showing your kids the power of saving money while they’re young, along with giving them basic knowledge of compound interest can set positive behaviours that’ll see them save well through life. A great example to help teach them: ask would they rather have a penny that doubles every day for a month, or a million pounds today. Take them through the task, but let them reach the magic moment on their own.
Appreciate the value, not the cost.
Your child doesn’t need to know the interest rate on your mortgage or your monthly credit card bill. But including them in conversations relevant to the things you buy as a family. The more open, honest, and clear you are about what things cost and how you choose to spend your money, the more comfortable your children will become with the concept of financial prioritising, investing in things with importance and longevity, and separating needs from wants.
Empower them to enjoy the fruits of their labor.
As children start earning their own money (whether a part-time job or chores around the house), let them figure out their own sense of value and worth. Was it worth the hard work to blow their money on the first thing they laid eyes on? If it was, fantastic. If not, they can try and save next time for something really worthwhile. As children get older it’s great for them to feel a sense of accomplishment in earning something important to them over a period of time. They also need to learn how to strike their own balance between saving for the things they want (and want to do in the future), and enjoying life right now. It’s the first step on the road to planning well and living happy.