As a professional financial planner I spend my days talking with adults about their investments, spending habits and savings plans.
As a dad, something that I try to do (and often don’t succeed) is to teach my kids about money. A recent example was that I actually had cash in my wallet (you remember those plasticky things that have a 5, 10, 20, 50 or 100 on them??) and used it to pay at a supermarket. As the change came out of the self-serve machine, Miss 6’s eyes opened wide and was like “what is that?” …………. Uh ohhhh, I’ve not done my job too well in that department!!
She thought that all our money was “in your phone dad”!
Teaching kids about money management from an early age can set them up for a successful financial future. Here are some money tips for kids:
- Start with the basics: Teach your kids the value of money, how it is earned through work, and the importance of saving.
- Set goals: Encourage your kids to set short-term and long-term financial goals. It could be saving for a toy, a bike, or even university.
- Save money regularly: Teach your kids the habit of saving by setting up a savings account for them. Encourage them to save a portion of any money they receive, such as allowances or gifts.
- Differentiate between needs and wants: Help your kids understand the difference between essential needs and wants. Teach them to prioritize spending on needs first before indulging in wants.
- Budgeting: Introduce the concept of budgeting to your kids. Teach them to allocate their money wisely by dividing it into categories such as saving, spending, and giving.
- Delayed gratification: Teach your kids the value of waiting and saving for something they desire. This will help them develop patience and avoid impulsive spending.
- Comparison shopping: Teach your kids to compare prices and look for deals before making a purchase. This will help them become smarter consumers and make informed decisions.
- Teach them about debt: Discuss the concept of borrowing money and the responsibilities that come with it. Explain the importance of avoiding unnecessary debt and paying bills on time.
- Lead by example: Children learn by observing their parents’ behaviour. Be a good financial role model by demonstrating responsible money habits, such as saving, budgeting, and making wise spending decisions.
Remember, it’s important to tailor these tips to your child’s age and understanding. As they grow older, you can gradually introduce more complex financial concepts and responsibilities.
