One of the most valuable gifts you can pass on to your children is teaching them to handle money wisely.
This helps establish sound values and gives them a sense of confidence and control around a sensitive subject.
Decide between needs and wants
An early lesson is helping kids differentiate between what they’d like to have and what they really need. Rather than say you’re not buying them something “because we can’t afford it”, explain that you’re choosing to spend your hard-earned cash in another way.
For example, “I’m saving money so we can go and visit granny and grandpa in the school holidays”.
Understand the value of money
Using coins, notes and calculators in games is a good way to teach children about the value of money, and to pass on maths concepts such as addition, subtraction, multiplication and division. You can show them colourful “deals of the week” ad flyers, and ask them to help you do price comparisons in the supermarket or on an app.
Handle money well
Pocket money is an important step in teaching children financial responsibility. Pay children pocket money once a week. As they get older you can make this once a fortnight and later once a month.
This will teach them to make it last.
Money is earned
Children should learn money’s earned, not given. They can earn pocket money for doing household chores like making their bed, feeding their pet or washing up.
Learn to save
You can encourage younger children to put away some of their pocket money in a piggy bank each week. As they get older, open a bank account and suggest they try to save some pocket money and also any additional income they may get, such as birthday money or income from part-time jobs.
If they want to buy a big-ticket item like a music gadget or surfboard, explain how they’ll need to save for it, possibly sacrificing other want-to-haves.
Sarah Nicholson is commercial manager at Justmoney
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