We all know children are not born knowing how to handle money. We need to teach them. Everything we do and say is being recorded by a child’s brain. They are always watching their role models and pick up similar traits and habits. If you cannot manage your money, then how do you expect your children to be able to do it?
Here are some tips on ways to teach your child about money:
- Allowing your child to earn money and then choose how to spend or save their money is a valuable lesson.
- When dealing out an allowance it should meet your child’s needs plus a bit extra. That way they can learn to save this money.
- If you decide to give an allowance, pretend it is for choirs around the house. Money is not free when you get older.
- Earning money and spending it can show the value of money to a child.
- When giving a child an allowance, treat it as a paid job. Some children might have a few household jobs to qualify for the allowance.
- Set a goal for the child to work towards. For example you can show them how to buy a big item that you have scrimped and saved for. When you actually can buy this item it is a great achievement. Later they can move on to bigger items such as a car and house.
- Make sure your child has a money box and knows the money is building up each time they add to it.
- Open a bank account with the child’s own name on the account. Let them watch the money grow.
- Before handing money over to your children, ask what they plan to do with it and discuss it further.
- Don’t hide your child from poverty. Show them the other side of life and remind them that saving money is a vital part of life.
Here are some quick ways to be a good money role model to your children:
- Let them see that you are in control of your money.
- Let them know your goals and make sure they see you achieving them.
- Advise them every step of the way and use your personal ecperiences as examples.
- Don’t hide the families finance situation from them. They always know what going on and can learn from the truth.
Spending your money is ok if you are in control of your money. Some very rich families feel “out of control,” and some very poor families have this vital feeling of being “in control.” Help your children learn how to be “in control” of their spending.