As parents we educate our children about a lot of things. We teach them how to treat others, how to take care of themselves, how to make friends, how to cook, how to throw a ball, how to count to ten, and many other useful life skills. It is also very important that we teach them about money and how to manage it well. Money management skills and the ability to save and control spending are very important to success, and if your child has these from a young age it will give them a great advantage.
What is the Right Age for Talking to My Child about Money?
There is no particular age for beginning to educate your children about finances; it really just depends on you and your child. Very young children can understand the concept of counting, and as they grow older they can start to have a more complex grasp of the relationship between those shiny coins and the food that they eat for dinner. When they become pre-teens they are ready to have an allowance, and by the time they are teenagers they might be ready to have their first job.
Teaching Tips
Here are some helpful tips for teaching your children about saving money:
· Children learn by example, so model good money saving behaviours yourself. If you have a savings goal, put an amount of money away each week towards your savings, and explain to your children why you are doing this.
· When you are shopping, talk to your children about why you make the choices you do. For example, point out to them that you choose the cheaper brand or decided not to buy something so that you would have more money to save.
· Talk to your child openly about the family budget. Let them ask questions about how you and your partner manage your household expenses. Ask them questions too and listen to their opinion.
· If you feel that your children are old enough, start to give them an allowance. It can be a small amount per week, and it can be in exchange for doing their chores. You might even decide to pay them on a per-chore basis, so that they learn that the harder they work the more they earn.
· Talk to them about what they will do with their allowance money and any other money they might have from babysitting or a paper round. Will they want to spend it all every week, or put some of it away in savings? Talk to them about how saving their money for a while means that they can buy themselves something much bigger later on, such as that big new toy or computer game that they have been eyeing.
· Set a good example. Open a regular savings account and show your child the balance as it grows.
· Many banks will have special accounts for youth. Take your child to the bank and encourage them to open one of these accounts with their savings if they are interested. Some banks will even offer small bonuses to young people opening their first account so this can provide an incentive.
· When your child has saved enough of their earnings to meet their goal, praise them for a job well done!
Saving money first hand will help your youngsters experience for themselves how money works and learn how they can successfully meet their financial goals in the future.