Do you remember how old you were when you began learning about finance, savings, and budgeting?
For me my earliest memory of any financial teaching was seeing my Mother and Father sitting at the dinner table each week furiously scribbling on scraps of paper, and discussing how little money they had left for groceries that week. Even though my parents never really taught me directly about money, and the importance of being sensible with it, seeing them struggle gave me a stark early warning about how important it was to master your finances.
Fast forward to today and the worlds stark economic situation. Recessions are not unusual, but this global recession that has hounded us for the last few years has been one of the worst in recent history. It therefore becomes even more important to teach our children about money and finance so that they may have a better chance at avoiding the mistakes that some of our generation have made.
So what are some of the best ways to give our kids a good financial grounding?
The best way to start your lessons in finance with your children is to give them some money of their own each week or month. Just a nominal amount will do. The key here is to give them the sense of having their own money rather than any money they have being yours.
Decide whether you want to give the money weekly or monthly, and then try to stick to the regular intervals to give them the feeling of a steady stream of income.
Give Them The Chance To Earn More
As well as, or even instead of, give your children a chance to earn some money by helping you with some chores around the house. Helping with the washing up, or helping Dad clean the car could be worth a little extra, and will get them interested in working for money rather than just having it handed to them.
This is a very effective way of introducing the idea of the working lifestyle.
Let Them Buy Their Own Treats
Unless it is a special occasion like Christmas or a birthday, let your children pay for any treats or toys they want to buy. This will get them used to the idea of having to budget, as well as helping them start making decisions about only buying things they really do want.
If there is something they want and their pocket money doesn’t quite cover it, explain that if they save up a week or twos money they will be able to afford it.
Teach Them To Save Early
One of the most important lessons we can teach our children about finance is that it isn’t necessary to spend every cent you have in your purse. Showing them that effective saving can help them in times when they really want to buy that special something will hit home the message.
The earlier you can get them interested in saving the better. They may not be keen to begin with, but in a few years time when they want to buy that first car for example they will be very grateful for your teachings.
Although as parents it can be very tempting to buy our children everything that they want, in the long run by doing so you are probably doing them more harm than good. A few tears because they are a few dollars short for that computer game will be well worth it when in years to come they encounter that inevitable rainy day.