Do you ever look back on your childhood and wish you’d had more lessons on how to manage money?
A lot of people leave school or college feeling absolutely clueless when it comes to money. From balancing a bank account to managing monthly payments, it can all be too much. However, throughout life, we (hopefully) get out finances on the right track, but we want our kids to learn from our own financial mistakes.
Here’s how you can teach your kids all about money, regardless of their age:
From Kindergarten to Elementary
When your kids are young, it’s important to use visual tools to get your message across. So, rather than using a piggy bank to accumulate savings, use a clear jar so they can see their money growing on a daily basis. Talk them through the benefits of doing this and praise them when they add more money to it.
This is also a great way to show them how things cost money, so when they want a new toy, take some cash out of their jar and to the store with you, so they understand how the process works.
And don’t forget, even though they’re only little, they’re still observing everything you do. For example, if you’re only every using a credit card or you’re constantly arguing with your partner about money, they’ll pick up on this. Try to set a good example for them, so they get into good habits from an early age.
Continue to show your child how everything costs money, demonstrating how financial decisions have consequences. For example, if they want to buy a new pair of shoes, explain that they won’t be able to afford the video game they’ve been wanting.
It’s also important to make sure your child understands they can’t get money for doing nothing. So, if you’re giving them an allowance, make sure they’ve worked for it by doing chores around the house. Whether it’s helping with the dishes at night or cleaning their bedroom, these little things will help them learn money isn’t just handed to them on a plate.
High School and Above
Once your child reaches their teenage years, the most important financial lessons come into play. Now, you’ll need to teach them about the responsibility they have over their own finances. Set up a bank account for them so they can prepare themselves for what’s ahead, and help them find a job so they can start earning money.
Now’s also a good time to teach them about credit cards and all the dos and don’ts involved in these. Explain the importance of having a credit card to build up a credit rating while also being aware of making regular payments, low annual fees, and the dangers of not paying off their bills on time.
It will take some time for your child to learn key money management skills, but it’s worth doing. Teaching your child how to successfully look after their own money will teach them fundamental skills for the future.