Help Your Kids Develop Good Money Habits!
Starting to teach your kids good financial habits can start very early. The sooner you begin, the more confidence they will develop.
When you help your children understand how good money habits work it becomes less mysterious. They will believe they can control their choices with money and manage it well.
Having a financial routine for your kids is valuable. Help them plan how to earn money and what they will do with it when they receive it.
This gives them an opportunity to make choices, have a sense of accomplishment as they see their savings grow, and when they save for something they want to buy. These are good experiences to build on as they get older and have more opportunities to manage their money.
Here are some ideas from Forbes on how to teach your 6-10 year old about money.
The Lesson: You need to make choices about how to spend money.
At this age, it’s important to explain to your child, “Money is finite and it’s important to make wise choices, because once you spend the money you have, you don’t have more to spend,” Kobliner says.
While at this age, you should also keep up with activities like the saving, spending and sharing jars, and goal-setting, you should also begin to engage your child in more adult financial decision-making.
Activities For Ages 6 To 10
Include your child in some financial decisions. For instance, explain, “The reason I chose the generic grape juice rather than the brand name is that it costs 50 cents less and tastes the same to me,” says Kobliner. Or talk about deals, such as buying everyday staples like paper towels in bulk to get a cheaper per-item price.
Give your child some money, like $2, in a supermarket and have her make choices about what fruit to buy, within the parameters of what you need, to give them the experience of making choices with money.
When you’re shopping, talk aloud about how you’re making your financial decisions as a grown-up, asking questions like, “Is this something we really, really need? Or can we skip it this week since we’re going out to dinner?” “Can I borrow it?” “Would it cost less somewhere else? Could we go to discount store and get two of these instead of one?”
– via Forbes
Money Lessons Are Everywhere
Don’t save your lessons about money for one afternoon a month and then forget about it the rest of the time. The best way to teach kids about how to use money is naturally in real life situations.
Here are some ideas of simple ways to make money talk a part of your routine with your child. When you start talking to them about money at 6 it will be much easier to get them to talk to you when they are 16!
When should you talk to your kids about money?
Teaching younger kids the value of money through real life situations and examples will help them understand where money comes from and how it is earned. Here are a few examples of how you could approach this with your kids.
At the ATM
The ATM is a great place to start teaching kids about money. You could explain to your child that the ATM holds the money you have made by working hard and saving. It is not just a hole in the wall where money comes out.
When you take money out of the ATM it is taken from your bank account and you’ll have less in your account to spend later.
At the supermarket
When buying items at the supermarket, you can explain to your kids how items are priced and that you can get cheaper or more expensive versions of the same product. This is also an opportunity to discuss how you can shop around for the best price.
You could get them to compare prices for you and pick the cheapest one. If they want a particular brand then explain the price difference to them.
If you receive bills in the mail or online, this can be an opportunity to explain that electricity or your internet connection costs money.
You could explain that to pay a $150 power bill it took you so many days at work to earn the money.
This will help create a connection between time spent at work and money, as well as the fact that electricity and the internet cost your family money. It might also make them think twice about leaving lights and appliances on.
Doing a budget
Involving your kids in discussions about your family budget is another way you can talk to your children about money. This helps give them the big picture about costs and spending.
By explaining how much money your family has to spend every week and how this money is spent your kids will better understand the costs of family life and how much can be saved for other things.
Giving pocket money
Pocket money can help children better understand the value of money.
– via www.moneysmart.gov.au
Have you started teaching your children about money? When did you begin?