Teaching Your Kids to be Good with Money
Bringing up children is hard work most of the time. It’s noisy, relentless and exhausting and sometimes you look around a flooded bathroom and wonder why on earth you’re doing it. The reason is to send out at least one decent adult into the world. One of the most difficult bits of being an adult is managing money and making long-term plans for it.
It seems that while schools are teaching kids all about climate change and recycling – as they should, of course – they’re missing out on giving them a financial education. It’s up to parents, it seems, to instill good financial habits and information into their children. If you’re not exactly a financial genius yourself, you could end up passing on no – or even bad – habits to your children and this is hard to change once Junior leaves home.
Thankfully, there are some ways that even the financially-indifferent can teach their kids to be great with money.
You should see finances as just another life skill
You want your kids to do things like gardening, washing up, unloading the dishwasher, helping elderly neighbours and taking the dog for a walk as it’s all good practice for proper adulting. Well, so is being good with money. It doesn’t matter how large or small the amounts are, your kids have to get used to knowing that once they’ve spent £15 out of their £20 holiday money that they only have £5 left. They should also be looking at websites like Creditfix to learn more about money, debt and how not to get into financial trouble.
Avoid the temptation to bail out your children
So, with more than a week of holiday to go and only a fiver left, your child might be feeling hard done by. You did explain to them that they were wasting their coins on the penny waterfalls, but… An important lesson about money is that once it’s gone, it’s gone. It’s better if they learn this while you’re still looking after them!
Realise that it’s never too soon to start learning
Kids learn by example, so when you’re out shopping, pick up two different brands of soup and explain that you’re going to choose the cheaper one because it costs less but it’s just as good. Talk about the special offers you can see on display and why 20% off is a good thing.
Tell them where money actually comes from
Many children do actually believe that ATMs are an ever-generous, inexhaustible source of banknotes that you can call upon when you need money. What you need to do is make sure that they know you’re refilling your individual account by working. If your eldest wants to go to the cinema and the whole shebang will cost £20, explain that you’ll have to work for an hour to send him there. It’s making that vital connection between work and earnings that’s the key.
Always encourage them to save
If you give your children £2 a week in pocket money, encourage them to save 50p of it so that they have the princely sum of £26 by the year’s end. They could have even more if they get a decent interest rate – kids love the concept of compound interest, so make sure they learn about it early on.