Teaching your children about money at any stage is going to take time on your part. It won’t always be easy. But if you want your children to know how to successfully manage their money when they get older, taking the time now will be worth it.
One of the best ways to teach your kids about handling money is to give them a chance to make some of their own
The sooner parents start taking advantage of everyday teachable money moments (for example, give a six-year-old $2 and let her choose which fruit to buy), the better off our kids will be. Parents are the number one influence on their children’s financial behaviors, so it’s up to us to raise a generation of mindful consumers, investors, savers, and givers.
Children develop their habits and attitudes about money from their parents and how money is managed at home. Giving kids pocket money is a great opportunity to teach children the value of money and help them understand about saving, spending and donating.
Giving your children money can help them to make money decisions. They can choose whether to spend their money now or save it up for something bigger.
Paying pocket money is not appropriate for every family so it is up to you if you prefer to use other ways to teach your children about money.
RELATED: How Too much freedom has affected university students.
The piggy bank is a great idea, but it doesn’t give kids a visual. When you use a clear jar, they see the money growing. Yesterday, they had a dollar bill and five dimes. Today, they have a dollar bill, five dimes, and a quarter! Talk through this with them and make a big deal about it growing!
When you pay kids pocket money, use this time to chat with them about what they plan to do with their money.
You could start with weekly payments for younger children, and then extend to fortnightly and then monthly payments for older children and teenagers. This will help your child develop budgeting skills as they will need to manage the money over a longer period of time as they get older.
When a child gets to an age where they could start part-time work, you could consider cutting back their pocket money to encourage them to look for a job.
You’ve got to do more than just say, “That pack of toy cars costs $5, son.” Help them grab a few dollars out of their jar, take it with them to the store, and physically hand the money to the cashier. This simple action will have more impact than a five-minute lecture.
Don’t just give your kids money for breathing. Pay them commissions based on chores they do around the house like taking out the trash, cleaning their room, or mowing the grass.
RELATED: How To Teach Children To Make Smart Money Choices.
Once they start making a little money, be sure you teach them about giving. They can pick a church, charity or even someone they know who needs a little help. Eventually, they’ll see how giving doesn’t just affect the people they give to, but the giver as well.
By the time your kid’s a teenager, you should be able to set them up with a simple bank account if you’ve been doing some of the above along the way. This takes money management to the next level, and will (hopefully) prepare them for managing a much heftier account when they get older.
When you think about it, teenagers have plenty of free time—fall break, summer break, winter break, spring break. If your teen wants some money, then help them find a job. Better yet, help them become an entrepreneur! These days, it’s easier than ever for your teen to start up their own business and turn a profit.
Teaching kids about money is an important skill. Money skills should be developed from an early age and fostered into young adulthood. The more financially savvy your children are the better spending decisions they will make throughout their lives.