Raising children is chaotic, noisy, often smelly and sometimes even fun! You’re not actually raising children, though; you’re raising adults. Grown people who do adult things like drive, have jobs, put out the recycling and manage their money.
For many people, it’s this last bit of adulting that causes the most problems. This is possibly because while kids are taught the importance of lowering their carbon footprint at school (as they should be), their financial education isn’t as thorough.
It seems to be mainly down to parents to instil good financial knowledge and habits into their children. This is great if you’re good with money yourself, but if you’re indifferent at best, you could be passing on no knowledge at all or even bad habits to your children.
So, in no particular order, here are some brilliant ways to make your kids financially smart.
Treat finances like any other life skill
You let your children help out with the baking, the weeding, taking the dog for a walk and so on, right? Paying bills, depositing money into a savings account and checking your balance are some more domestic tasks that can be shared, or at least witnessed, by your children. Talk to them about why you’re transferring £20.00 into your holiday account, have a look through websites like Creditfix with them so they can get ideas and information about money. It’s nothing to be scared of; it’s just another subject, like maths or learning to cook.
Don’t bail your children out
If your child gets £10.00 a week in pocket money and has a habit of blowing it on rubbish, then don’t give them any more until next week. They have to learn that once it’s gone, it’s gone. You could give them the option to run some errands to earn more if they’re older, but it’s best that they learn the hard way while you’re still feeding and housing them!
Don’t assume it’s too early to start learning
You can start talking to your children about money as soon as they can count. When you’re shopping, pick up an item, look at the price and explain why you’re going to buy another version or brand because it costs fewer pennies.
Explain where money comes from
Kids really do think that money comes from an ATM and that the answer to having no money is to visit this ever-generous benefactor. This misconception needs to be knocked on the head ASAP! Talk about your hourly or daily pay-rate, so that when Junior asks for those £40.00 trainers, you explain that you’ll have to work for two hours to be able to afford them. When they make the connection between time, effort and money, they’re part of the way there!
Encourage them to save some of their money
You should encourage your children to put away some of their pocket money, earnings and birthday money into a savings account. Even if it’s just 50p a week, by the end of a year they’ve got £26.00 plus interest! They’re not going to miss that 50p each week and they’ll be amazed at what compound interest can do for them over the years!