How much do your children know about the family finances? Have you ever included them in discussions about where your money comes from and where it goes?
It’s important that children gain an understanding about money from an early age and there’s nothing wrong with discussing the budget with them providing you keep it to a level that they can understand and don’t cause them to feel concerned about money issues.
Children are surprisingly savvy when it comes to picking up on their parent’s feelings and attitudes, and a healthy approach toward spending and saving is something that will benefit them in the future.
By the age of 5 or 6 they are able to understand the concept of earning, saving and paying. Encourage children to undertake simple chores in exchange for pocket money. It doesn’t have to be much. Children also need to learn about budgeting and saving and there is nothing wrong with teaching them the challenges of a low income. This can actually be a positive lesson for them for later in life.
Try to present money management in a positive light:
Don’t grumble about lack of money or show anger when they ask for something.
Turn it into a lesson. Discuss with them ways of obtaining things that they want. Talk to them about how you budget and save.
If you take them with you to the supermarket, talk about specials. Let them help you find the best value products. This is great for their math skills.
Let them see you using cash as well as your ATM card or credit card.
Explain to them where the money comes from (that it’s not ‘free’ money from a hole in the wall), how a bank works, etc.
Find out whether their school has a student banking facility and encourage them to use this. They can deposit very small amounts and do not incur fees.
Let them see you depositing money in a savings account or dropping coins into a moneybox. Encourage them to do the same.
Some banks will issue ATM cards to children as young as 12 years of age with parental consent. Think carefully before doing this. Perhaps you could keep the card in a safe place and monitor its use.
Explain the concept of lay-by and involve them in the process.
Provide them with an incentive to reach their goals. If , for example, your child wants a particular toy, cut out or draw a picture of the toy and stick it onto a glass jar. Explain that this is specifically to save for that toy. This establishes a visual connection to the goal. Each day or week you or your child deposits money in the jar and you keep a running total. (You may agree to match the savings dollar for dollar). Let your child take the jar to the shop to pay for the toy. This will serve to complete that visual connection.