Differnt Ways To Educate Your Children About Money
Helping your children to understand how money works and how they can save in their own time. Children need to know the value of their possessions to treat them with respect and in the long-term manage their finances properly.
Below are some valuable life lessons you can teach children of different ages and some things you can do yourself to be a good financial role model for your children.
Encourage Saving
It’s very common across the UK to buy expensive items on credit or when you don’t really need them. Every once in a while is OK but doing it on a regular basis results in the building up of large debts which become difficult to handle and it isn’t a positive image to present to your children either.
You shouldn’t always buy every expensive your gadget or toy your child asks for. You should try and encourage them to save for things they really want. The best thing you can do is help them understand how to set savings goals and help them realise there is a difference between things they want and things they need. Younger children may respond to savings charts with a photo of the lusted-after item at the top whereas older children may just want your support and encouragement.
You could suggest they put their money is a savings account of their own as then they can see the amount increase with interest as well as when they check their savings either online or at the bank. There are a range of children’s savings accounts but if you prefer to keep moneyboxes then perhaps you can pay them weekly interest as they save?
Another way of showing children the value of things is to give them the option of trading up. If they want the latest games console then give them the opportunity to sell the old Xbox to get funds for a new one. This helps them to understand that everything has a value and each new purchase means sacrificing something old.
Encourage Conversation
Introducing the concept of money as soon as possible is a great way to show children its importance and the need to understand it. You can start talking about money as soon as your children start learning to count – play shop games and give price tags to all items so they learn about different values.
As children grow you can begin to include them in using money on an everyday basis. The supermarket is a great place to begin, explaining to them that fruit and vegetables may cost a few pounds whilst meat is much more expensive and the electronics section includes items even more expensive than that!
Once they understand the basics of costs then you can introduce the idea of borrowing money and the implications involved. You can explain that you can lend them money for something they want but they won’t be getting their regular pocket money as a consequence. If they understand the concept you shouldn’t have to listen to daily whines of ‘I want I want.’
Giving your children a sound understanding of money management sets them along the right path for the future. Be honest, up front and be a good financial role model.
