Being good with money doesn’t come easily to everyone, so it’s really important to make sure your kids are well-informed about finances before they have to handle their own. You don’t have to go into too much detail (depending on their age) but all children should grow up with some awareness of realistic financial habits. While many kids will quickly learn that money doesn’t grow on trees, some will inevitably find it tough to budget and save as they get older. These tips will help you to manage their expectations and teach them the right way to spend cash before it’s too late.
Teach them about bank accounts
The best way to teach kids about bank accounts is by opening one for them. This will not only be exciting for your child, but it will help them to build real-world skills. As they get older, they’ll be able to use a debit card and check their savings balance too. You could also open a savings account that you put money into for your child, handing over the reins when they’re an adult. If you’re interested in learning more, you should check out the ISAs available here.
Give them pocket money
Some parents don’t give their kids pocket money and simply buy them the things they want, but this doesn’t help them to learn about money. By giving your child a small allowance they’ll be able to understand the value of things in their life. It also gives them the choice of spending coins on sweets or waiting a few weeks or months to save up and buy a toy they really want. Kids will quickly start to understand the concept of saving once it’s put into situations they can connect with.
Reward kids for chores
While some chores like tidying up toys have to be done for no reward, you could give kids a small amount of money for doing a task that they don’t need to do every day. This could be weeding the garden or babysitting younger siblings. By doing this, children will understand they have to work for their money in life. It will also help them develop a greater sense of responsibility and set them up well for part-time jobs in the future.
Talk to them about debt
Credit cards and loans can seem attractive to young adults who don’t fully understand their implications, so make sure you have conversations with your children early on. Sometimes people get into financial trouble simply due to a lack of understanding, so as your kids become teenagers, it’s important to educate them. While some schools will cover finances, many young people are left unequipped to handle money. If you or a family member has struggled with debts in the past, explain how devastating it can be and how they can avoid it at all costs.
Money isn’t always the most exciting topic for kids to learn about, but it can be fun once they realize how financial awareness can help them to live the life they want.