Six things to teach your kids about money
We all want the best for our kids. We want to pass on our best characteristics and strengths and spare them the mistakes we made over the years.
Teaching children about money and instilling good money habits from a young age, sets them up to be wise with money and manage it well. Remember that kids learn most from what we do, not just what we say. Make sure you “practice what you preach” when it comes to money!
Here are six things you should be teaching your children about money, right from the start.
What to teach your kids about money
My greatest hope for my kids when it comes to money (and time), is that they are generous. It is a value I really want to instil in them.
It is so easy to be greedy in today’s society, to want more all the time and to never be satisfied. Greed does not bring contentment. I don’t want my kids to buy into believing that money brings happiness or that it is the goal of life. I want them to be generous, to see money as a tool for good, not as something to accumulate and keep for themselves.
Teaching kids to be generous is also about teaching them not to be greedy. To not constantly expect (& desire) new and better things. Help them to focus on others, to give with their time and their money to those in need, not to focus on “things” but rather on relationships.
In our world of credit cards and fast loans, saving has gone out the window. We want it all and we want it NOW! Many teenagers wouldn’t even know what lay-buy is, and most adults happily stick something on the credit card rather than saving.
Teach your kids to be patient, to save for something that want. Help them to understand the value of money (and the things that money buys!)
I’d encourage you to have your kids put away small amounts of money each week if they get pocket-money or to learn to “save” via earning rewards (even if non financial) for things they want.
Helping kids to understand the concept of money in/money out is a hugely important aspect of their future money management. Many adults have no idea of how much they earn vs what they spend and this is a major contributing factor for the amount of debt we are in as a society.
Teaching budgeting can involve showing your children how much there is to spend on a particular area and getting them involved in choosing how to make that work. You could take $20 to the supermarket and explain they need to create a meal for that amount. Help them see that spending over the budget is spending money you don’t have (or that you need the money to come from somewhere else). This can also help children to be grateful and have patience when it comes to items they want.
Research & bargain hunting
I am always amazed at the number of people who will walk straight into a store and make a large purchase without doing any shopping around, comparisons or research. I’m not talking here about bargaining a business down to their lowest price but simply looking into available deals and comparing pricing. Price won’t be the only factor but you should know what you are paying for and whether you’re paying too much.
The same goes for everyday items. Consider buying in bulk when things are on special. Teach your kids about sales and how they work. Explain to them why it is sometimes worth waiting for an item to come on sale rather than buying it right now.
Along with saving, helping your kids and teens to have a basic understanding of investing is a really wise investment (;)) in their financial future. Help them to understand the concept of risk and some of the options for investment out there. It might be an area that you could learn about together if it isn’t something you are knowledgable on.
Unfortunately with more technology and the increased emphasis on it, there are now more scams out there than ever. Teaching older kids and teens about some common hallmarks of scams is an important part of helping them to be wise financially. Ultimately, if it looks “easy” or too good to be true when it comes to money, it probably is!
Do you talk to your kids about money? What advice do you have?