Written by: Jemma Porter
As a youngster, I thought that if you needed money, you either got some out of your purse or went to the bank. Whilst that is true to a certain extent, it isn’t really the whole picture.
If you want your children to grow up understanding the value of money, it’s important to start teaching them from as young as possible. You might think it’s hard enough to get the little ones to pick up after themselves, never mind understand complex finances. However, with a little bit of creativity and persistence, even toddlers can grasp the basic concept.
Little ones don’t understand complicated analogies, they’ll only take in information if it’s provided in a way that they can absorb it. So, by providing visual and physical aids, they are more likely to pay attention.
Start by asking your child to draw pictures of things that they want, some smaller things, a packet of sweets for example, but also larger ones, such as a new bike or holiday. Use this opportunity to explain that some things take longer than others to save up for, so you’ll have two jars ‚Äď one for short term savings and the other for long-term.
Draw up a chart with their savings goals and each time they put their money in the savings jar, they get a sticker on the chart. This allows them to see how close they are to achieving their target. You might want to add in some rewards for reaching milestones along the way.
If your child is above the age of 10, it’s unlikely that a chart is going to inspire them to put their money to one side any more. This doesn’t mean that you can’t teach them to save, you’ll just have to think of a new way.
The first thing to do is open a children’s savings account, as this will instantly help your child feel more responsible. Plus, there’s also the opportunity to start earning interest.
Your older children can also write out a wish list, so that they have motivation for saving money. They might want a new mobile phone now, but be planning on buying a car when they turn 17. No one’s suggesting you send your teen out to work, but they can use any money received as gifts and their pocket money.
Talk about money
Money and personal finance has often been a topic to avoid, but by being honest about your own financial situation, the younger ones will be able to discuss it openly. You don’t always have to go into detail, but even something as simple as comparing prices on the energy bills is a good start.
It’s important that you start teaching your children about money from an early age as this will prepare them for when they’re older. Don’t forget that kids often do as you do, rather than as you say. With this in mind, it’s essential that you set a good example with your own finances.