As an adult, I’m not particularly great with money, but I’m keen to make sure my kids are much more financially savvy than I am as they get older. Teaching them from a very young age can put them in good stead for the future, but I know from my own experiences both with my own kids and as a teacher, the concept of money can be really challenging for children to grasp.
If you are looking to teach your kids about dealing with finances, here are a few tips to help you on your way.
5 Top Tips To Make Your Kids Money Savvy
1. Encourage saving from an early age
You can never be too young to start saving! It is essential for children to understand that just because they have some money in their pocket, they don’t have to spend it – a lesson many of us as adults still haven’t quite grasped! Open up an ISA to help them and show them how they can earn an extra few quid along the way.
2. Practice budgeting
This can be really fun for children. When you go shopping, give them a set amount of money and let them see what they can buy within that budget. Can they buy all the ingredients needed for a meal for the family? Or can they buy the things they need for their packed lunch? This will allow them to develop a better understanding of the value of money and is good practice for when they leave home, get a job or go to university.
3. Teach them about credit
These days it is all too easy to whack something on a credit card or store card, or take out a loan and worry about paying it back later. It’s one of the easiest ways to spiral into debt, so it’s essential we teach children that credit isn’t ‘free money’ and the consequences of using it. Help them to understand by lending them a small amount of money and agreeing on the interest rate that they need to pay back each month. Keep the money they payback aside and pop into their savings for them.
4. Make them earn it
One of the easiest ways of teaching children that money doesn’t grow on trees is by getting them to work for it. Let them do some age-appropriate jobs around the house to earn a little bit extra pocket money.
5. Teach them the language around money
This is something I think many adults struggle with. There are so much jargon and terminology associated with money that unless someone sits down and explains them, it’s hard to understand. APR, Interest, Inflation, Overdrafts…talk to them about the words and what they mean. This website is handy for more information and is a great starting point for some of the more tough conversations you might have to have about money.
What are your top tips for teaching children to be more money savvy?