Teaching money habits to our children
Money and managing finances are a very important part of adulthood, and more often than not, good money habits start from a young age. So, how do you teach your younglings about money?
Talk about money
Parents often feel anxious and unprepared to discuss finances in front of their children. However, open and honest conversations surrounding money will make your child more confident in handling their own money matters. Describe your own relationship with money, the fails as well as the successes you have had, making sure to impart your own knowledge onto your children.
Model good financial behaviour
Most children mirror actions and behaviours they see their parents and guardians doing. In the same manner that they learn to emulate language, children will observe and catch onto the good (or bad) money habits of their parents. Therefore, it is important to model good financial habits oneself through shopping on a budget, not spending excessively and unnecessarily as well as saving money, etc. More often than not, children will pick up these habits on their own.
Shop with your children
For most children, their things simply exist freely in a vacuum until their guardian brings them out. This instils a belief that their toys, candy do not cost money. Next time you go shopping, be it for monthly groceries or just for fun shopping, take your children with you. Ask them to hold the jar of pasta sauce, tell them the price and let them take it in. Involving your kids in shopping means allowing them to learn the cost of items around them.
Help your children earn their own money
Most of us value money far more when we earn it ourselves and children are no exception to this. Help your child earn money by giving them allowances through doing chores around the house such as putting away their toys, washing the dishes, helping with the pet, etc. This not only teaches them the value of their hard work, but also increases the value of money in their eyes.
Explain the difference between wants and needs
Assist your child in understanding the difference between a want and a need. Ask them hypothetical questions such as what would happen if they bought only toys for a week instead of groceries — let them ruminate on this before you explain that needs must always come before wants. Put this into action by taking them shopping and making them pick out things the household would need before the things they might want.
Teach your children about budgeting and saving
Most kids have wants — it may be a new dollhouse, the latest iPad, or even a smashing birthday party! This is the perfect opportunity to teach your children about saving and budgeting. Tell them that in order to get the new dollhouse, they need to contribute an amount to it and help them make a budget in order to save up for it. Get them a piggy bank to deposit their allowance or earnings every week. This teaches children the importance of having money-saving goals and they will definitely value the reward far more in the end!
Teaching your children about money from a young age can lay the groundwork for a bright, financial future for your child and will help them live a financially fit life!