Tip #1 – Teach kids to budget
Budgeting is one of the best skills a child can learn which they can continue to use throughout their lives. Giving children pocket money in return for completing chores can be a great way to help them better understand the value of money. It allows them to take control of their money and how they spend it. Help them develop a simple visual budget that shows them what they are saving for, what their contribution is and how long until they will reach their target.
Tip #2 – Needs v Wants
It is important to teach kids the difference between needs and wants and encourage them to think about this before spending. You can help your kids avoid impulse purchases by setting goals to make them think about whether or not they want an item before parting with their hard earned money.
Tip #3- Lead by example
As a parent you have a great deal of influence on your children so it’s important to set a good example from an early age. Get your kids involved in your financial decisions and processes. Take them with you when you see your accountant or do your banking. The more exposure your child has to money the more they will learn.
Tip #4- Teach kids that the ATM machine is not an endless cash machine
The ATM is a great starting place to teach your children about money. By explaining to your child that the ATM keeps safe the money you have made from working hard and saving they can learn that it is not just a hole in the wall with a never ending supply of cash.
Tip #5- Teach kids that it’s not how much they earn but what they do with it
It is important to teach kids that it’s not how much money they make that counts but rather what they do with that money which will determine their financial success in life. Children need to understand that wealth is not a result of luck or necessarily having a highly paid job, that most adults have worked hard and made smart decisions to end up in a good financial position.