Teaching your kids about money helps to equip them with the skills and knowledge they need to navigate life effectively. Money skills can help to ensure a secure future for your children, while also teaching them that “money doesn’t grow on trees”. So, the sooner you begin to develop their financial skills, the better.
Here are some easy ways to introduce your kids to money.
For younger children, giving them a visual is a great way to teach them about money. While money boxes can be fun, using a clear jar is a much better way to save as your kids will be able to see the money growing week by week.
Once your jar is full, you can empty it and help your children to count and sort the coins. This is a good way to practice the maths skills that they are learning at nursery or school. It also provides a real-world application which can aid learning.
Allowance (or pocket money)
You can begin to give your children an allowance wherever you feel they are ready. Whatever age you decide on, it can be a good idea to make sure they are earning it.
Doing chores and jobs around the house can help your children to learn about money, no matter what their age. There are lots of age-appropriate chores for your kids; younger children can tidy up their toys or fill up the family pet’s food bowl, whereas older children could mow the lawn or wash the car.
Giving children money in return for completed chores helps create a work ethic, and teaches them that money is earned rather than given.
Teach them to save money
Teaching about savings should start early so that your kids are aware that they can’t just have anything they want, whenever they want it.
For younger children, you could work with them to save up their pocket money for a toy that they want. Again, you can use your clear jar here and once you reach the amount needed, visit the shop and let your child hand over the money. Physical and interactive elements are important when it comes to money as, even for adults, using cash rather than spending online helps to avoid overspending.
You may also look to open a children’s savings account as not only do they teach kids about money, but they help them to save for the future. To get the most out of the savings account, encourage children to pay into the account so that they get used to the idea of saving regularly. You can talk through the rules of the savings account, such as interest rates and types of access, this will help your child to further understand money and banking.
Set an example
Studies have shown that money habits in children are formed by the time that they are 7 years old. This means you should be actively setting a healthy example from an early age if you want your children to have a good relationship with money when they get older. You should also be aware of having arguments at home about finances, as your children may pick up on this.
As we tend to use more virtual money rather than cash nowadays, be sure to explain to your child that virtual money is also part of budgeting, and set this example when paying in shops or online
By allowing your children an insight into the world of money and budgeting you can help shape their future and teach them valuable life skills. Have you got a top tip for how to introduce your kids to money?