As the world is changing so rapidly, educating your children about managing money has never been so important. By developing good financial skills from an early age you are setting them up for the financial challenges of adulthood and personal development. Showing children the basics of budgets, spending and saving will create good money habits for life.
We live in a time where credit cards, internet banking and online shopping are the “in” thing due to the convenience they offer, especially to people with children. It saves parents having to take all children with them to the bank, grocery store and shopping centres. As our lives get busier and busier with work, social and child commitments we rely on online facilities that we are able to use at a time convenient to us e.g. online shopping at 12:00AM once the kids have gone to bed and you’ve finished cleaning the kitchen.
Living in such a technology driven world children don’t often see people buying products with physical money like notes and coins. By making an effort to pay with physical money while your children are present can often help them differentiate between “invisible” money and physical money.
There are many situations that are perfect for talking to your children about the value of money and how it is earned. Some of these include:
At the ATM– When taking money out at an ATM, this is a great place to educate children that the ATM holds the money that you have made by working and saving and it’s just not a hole in a wall that dispenses unlimited money. It is also important to let them know that by taking money out from the ATM there is less money left in the account to spend later on.
At the supermarket– When buying items at the grocery store you can make learning about money into a game. You can get your child to compare prices and pick the cheapest one, if they would like a particular brand of item you can explain the difference in price to them. This is a great opportunity to discuss how you can shop around for the best price. If you happen to shop at two different stores show them the receipt at the end of the trip and allow them to count the number of items you brought at one shop and compare it to the second receipt allowing them to see that some grocery stores are more expensive than others.
Paying bills- Everyone receives bills via mail or online these days, this can be an opportunity to explain that electricity/water or your internet costs money. To break it down a little bit further you could explain that to pay $150.00 electricity bill it took you so many days of work to earn that money. By doing this it can also create a connection between time spent at work and money.
Doing a budget- When devising a budget for your family it is recommended that you include your children, by doing so it helps give them a bigger picture about costs and spending. It shows what amount of money goes towards bills, what is left to spend each week and how much is left for saving e.g. family holiday.
Giving pocket money- By allocating a set amount of pocket money for your child in return for chores completed around the house teaches your children at an early age what it means to work in return for money. It is recommended that you encourage them to save this money and if there is something that they would really like to use the money that they’ve saved. If they don’t have enough money to buy what they want, you can also help them put together a plan to save up to acquire the desired item. Assisting them create a basic budget is a great way to achieve this.
Here at Grange Business Partners we believe teaching children from a young age about money is a great way to set them up with lifelong skills for dealing with money, saving and budgeting.