In a world where instant gratification has become a normal way of life, it’s more important than ever that children learn smart money skills from a young age. Many children grow up believing that mum and dad are a never-ending ATM, with online access to just about anything with the click of a button. And while it can be hard having to say no sometimes, it’s a big part of cultivating a healthy relationship with money. To help set your children up for a financially savvy future, here are some helpful things to consider.
1. Be a good role model
Your children’s first interactions with money will likely involve spending: Seeing you use money to buy things regularly – like the groceries or a take-away meal – and will begin to develop an understanding of spending.
Children learn by example for the most part, copying what you do rather than what you say. That’s why it’s important to teach them that money isn’t just for spending, it’s also for saving. Saving teaches children discipline and delayed gratification, and helps them understand the concept of goal setting and planning ahead.
To help your children get into the habit of saving, give them a piggy bank or a savings jar to start depositing cash into. Set up a bank account when they’re a little older and talk to them about setting short-term goals for spending their savings once they have enough to buy something they want.
2. Create opportunities to earn
Not only is it important to teach children about spending and saving money, helping them understand how it’s earned is a valuable lesson too. By creating opportunities for children to earn money, you can help them understand the value of their money: how much effort or time it cost them to earn that money.
Doing chores around the home or in the garden to earn pocket money not only teaches children the importance of everyone helping out, but that if they want to get paid then those tasks will need to be completed properly. Children quickly learn the art of negotiating additional tasks for more money, yet another valuable lesson in finance!
3. Budget for important things
Learning how to budget and how to live within your budget is a tough lesson, but an important one. It involves helping children make smart decisions about how they spend their money and what they spend it on.
Try this: set up three savings jars or piggy banks for your child. One for spending, one for saving and one for giving. Help them decide how much money goes into each jar, talk about how you would budget for things you have to pay for and that spending isn’t always about buying the things you want. More often it’s about buying the things you need.
Independence and security
Preparing children for a lifetime of independence and financial security is a goal for most parents. It’s the reason we celebrate each milestone, as each step forward brings them closer to becoming confident, self-sufficient grown-ups. Start teaching your children today to be financially savvy with a few simple steps to get them on the right path to spending, saving and earning.
For financial advice on mortgages or insurance , contact your local Mortgage Express branded financial adviser. Your financial adviser will listen to what you want, your hopes and dreams for now and into the future and, help you to get there.