As parents, teaching our kids about money is often one of the last things on our minds. We’re so busy trying to balance work and home life that it can be difficult to find time to sit down and talk with our kids about something as important as money management.
The good news is that there are a few simple steps you can take to teach your kids how to be smart with their money and start them off on the right foot. And remember – to equip your children with a more in-depth knowledge of how to manage debt and navigate other financial scenarios, Money 101 modules are a great resource.
Talk About Money Early On
It’s never too early to start talking about money with your kids. Introduce age-appropriate conversations about money when they’re young, so that it becomes second nature for them later in life. Explain basic financial concepts such as budgeting, saving, and investing, so that they understand why these things are important.
Set a Good Example
Kids learn by example, so make sure you set a good one when it comes to managing your own finances. Show them how you budget, save up for big purchases, invest in long-term projects or goals, and give back to charity or volunteer causes.
Give an Allowance Through Chores
Doing chores around the house should not come with an expectation of financial reward – but if you want your children to learn valuable lessons about earning money through hard work, then consider assigning extra jobs like mowing lawns or babysitting where they can get paid directly for their efforts.
An allowance isn’t just pocket change for your kids; it’s an opportunity for them to learn how to manage their own money responsibly. Have them set aside some of their allowance for short-term goals like buying toys or treats. Then encourage them to save the rest of their allowance for more long-term goals such as saving up for college tuition or a car down payment when they get older.
Let Them Spend Their Money
One of the best ways for your kids to learn about money is by making mistakes themselves. Give them permission (within reason!) to spend their money however they want without fear of punishment or reprimand if they make a bad decision – it will be an invaluable lesson in learning from mistakes!
Start Investing Early
Encourage your children to think long term by having them explore different types of investments such as mutual funds or stocks at a young age. You can even open college savings plans together or have them research ways they could monetise hobbies/skills while still in school.
Open Bank Accounts Together
Take your children into the bank with you and help them open up savings accounts in their name – this is a great way for kids to not only develop positive habits around saving, but also become familiarised with banking services (which will be invaluable when they become adults themselves).
Teaching our kids how to be smart with money is no easy task, but it’s worth doing because it sets up our children for success throughout all aspects of their lives
Start having conversations early on and set a good example yourself, so that managing finances becomes second nature as they grow older. And don’t forget – have fun while teaching these lessons! Games and activities are great tools that can help make learning enjoyable while still achieving results.
