Every parent wants their child to be successful – yet many parents forget that a major part of success involves proper management of finances. Teaching your child the importance of money starts with building sound financial habits from an early age.
Before they can count, read and write
- Show your child how to save money. Children love to imitate, that’s how they learn. Let them watch you put coins in a piggy bank – then encourage them to do the same. Explain that you are doing this so you will have money saved up to buy something nice later on.
- Take your children shopping with you. Try to make them pay attention when you are paying for your purchases so they begin to understand that things cost money. When they are a bit older, let them count out the money and pay for you.
- Don’t give your kids everything they want. Yes, it can be difficult when they’re screaming, stamping their feet and rolling around the shopping centre floor. But the judgmental glares of your fellow shoppers mean nothing if you’re teaching your children the value of money.
Once they’re literate
- Money is earned through hard work – so give your child a weekly to-do list of chores and activities that they have to complete before they receive their ‘salary’. Taking on extra work yields ‘bonuses’ or ‘increases’ – bad behaviour is met with ‘salary reductions’, which they have to work off.
- Use a simple budget. Tell your child that they have to split their ‘salary’ into 3 separate pots every month – saving, charity and spending.
- Match savings. For everything that your child puts into the saving pot, match it and put it into a savings account for them. Show them how much their account is growing on a monthly basis to encourage them to save.
- Teach financial discipline. Ask your child to draw a wish list of all the items they want in order of importance and write down their prices next to them. Saving for a certain purpose shows them they cannot have everything and will sometimes have to go without or wait until they can afford it.
- Be generous. Take your child to charity events, orphanages and fund raisers so they can see firsthand the hardships that people have to endure. Then let them decide which cause they would like the money in their charity pot to go to.
- Spoil them sometimes. Although money is important – it’s not the be all and end all. Treat your little ‘employee’ to something nice every now and again so you don’t create a Scrooge.
We hope these tips help you teach your kids how to be successful when it comes to finances – we’ll leave the rest up to you.
