Raising a child means equipping your offspring with the skills and knowledge that they will need to become a confident member of society. Money management is one of these skills, and understanding the value of money and how it can and should be used is a key survival ability in modern-day society.
There are lots of different ways to teach your child about money in a fun and positive light. These three major elements will help you to approach money matters with your kids in a constructive, educational and enjoyable manner.
Pocket Money
It’s easiest to teach kids about money when they have their own money to learn with. Giving kids pocket money in return for doing chores around the house or reaching goals is a great way to teach your children about working toward financial goals and earning money in return for effort.
By giving an allowance without requiring any work in return, you’re missing out on a vital real-world lesson about earning money. This will help kids value their money more, as they can feel the direct correlation between their hard work and the money they spend.
Cash is best for children, as a tangible currency is easier to understand – money that they cannot see and hold (as with electronic banking) can tend to be a little too abstract for younger kids.
Saving and Budgeting
Learning to save is one of the first skills you should teach your child to ensure a good grasp on money management for later years. Let him/her decide what they want to save for and discuss how long they will have to save for the item or how many chores they will need to do in order to earn enough to afford it.
Create something that your child can use to track progress, like marking off the days on a calendar (if they earn a certain amount each day) or crossing off jobs on a whiteboard as they complete the chores they’ll need to do to earn their goal amount. There are some great apps that allow for this kind of goal-oriented saving that you might like to explore.
Budgeting is another big part of managing money. Saving will be part of this, but also teach your child that they can put away some of their money for their savings goals and use part of it for smaller purchases along the way. It’s also a great idea to encourage your child to put a little away for donations to charity, a great habit to develop for later life. Again, there are some very helpful apps available that help you teach your child about budgeting, so it’s worth checking them out and finding one that your child likes to use.
As your kids get older you can try introducing them to online budget calculators like the Fox Symes “Budget Planner Calculator” (at foxsymes.com.au) – they can use the most basic elements of this kind of calculator and as their responsibilities and financial commitments continue to grow they can use more of the calculator to better manage their finances in an already familiar format.
Discussion and Play
Ask your child often about his or her progress toward money goals and readily offer advice and engage in conversation about saving, budgeting, and earning. Involve your child in your own transactions too, for example, create games out of grocery shopping (appropriate to your child’s abilities) that involve recognising prices and totals, or allow your child to put coins in the parking meter, to understand about parting with currency in return for something.
You can also engage in fun activities and games that encourage learning about money. There are lots of fun apps and online games that support financial education, and there are even some board games out there that are tailored toward teaching kids about income, saving and spending.
There are lots of available mediums for financial education, and coupled with leading by example and plenty of good advice you’ll be setting your kids up for a life of well managed money and financial security and understanding.
Katie is a Writer from Australia who writes for many well known news sites and blogs. For more helpful financial tips, Katie recommends checking out the Fox Symes blog.
