As a parent of three children I know that there are so many things that we?re meant to teach our kids. We need to teach them manners and good morals, we need to teach them how to be sharing and caring but also confident and strong. Plus there are the several hours of homework pain each week. So you can just add money skills to the long, long list!
Fortunately when it comes to teaching kids about money there are a few basic rules that can help to make it an easy process. Here are my top three tips:
Help them earn
Pocket money that they work for is fantastic because investing time and effort in earning helps kids to understand the correlation between work and reward. As soon as it?s practical, make them earn outside the household as well. As an example, my eleven year-old recently set up an after-school dog walking business. She?s now thrilled to be earning forty dollars per week – but understands the level of effort required to achieve it!
Make them spend
Once they?re earning money stop paying, out of your own pocket, for discretionary things that they want. Whether it?s an ice cream, or a DVD or a toy, putting some buying onus on them very quickly helps them to sort out their “wants” from their “needs”.
Help them save
If you can get into a savings mindset as a kid, it makes it so much easier to continue as an adult. So set them up with a bank account and, whatever they earn, encourage them to deposit ten percent.
There are plenty more great tips on teaching kids about money, including a “start early” challenge available at www.moneysmartweek.org.au.