Teaching your kids about money - where to start?

Set your child up for financial independence with these easy-to-follow lessons about money. Learning how to be well-equipped with money early on will ensure they are well placed to be financially healthy in adulthood.

Start small

When they’re at an age that recognises coins, notes and cards as a way to get ‘things’, it’s time to teach kids the value of money. Some parents find it a hassle taking their kids to the shops because of the "I want" nagging and tantrums after a "No". To avoid this pattern, give your child a small amount of spending money on your next trip, be it even one or two dollars. Every time your child asks for something that isn’t on the grocery list, ask them, "Do you have enough money for that?". By giving your child a little financial independence, you can teach them how quickly money can be spent, and how important it is to spend wisely.

Realise the art of patience

Over the years, the choice in children's toys has grown and grown. Today, there are numerous latest and greatest toys to choose from, with many of them on the expensive side. Browsing a shop or store can be a struggle for a parent, as there are many enticing kids' products on the shelves. To help a child figure out their needs over their wants, put in place a 24-hour rule. This can be useful for the whole family to adhere to - we all know that children learn from what they see after all. If you make it a rule to take 24-hours to think over any purchase decisions, everyone will have the time to evaluate if the item is really a necessity. This helps children learn the importance of being patient and valuing their money.

Teach them about money consequences

The older they get, the more expensive their wish-list becomes. As your child gets into their tween stage, it’s essential to teach them the difficult lesson of loans and debts. If they don’t have enough money to buy something they want, let them borrow the money from you, but with interest. If it's a really expensive item, have them pay for half through chores and half by borrowing. By seeing how quickly interest can add up, and that owed money continues to grow, your child will learn an important life-lesson. By understanding this early on, your children will be in a good position to approach loans with care in the future.

Teach them the value of money

While many households reward chores with pocket money, this may not be for every child especially if they are an impulsive spender. To teach a child the worth of money and the importance of saving, open them a savings account. By giving your child their very own bank account, your money lessons will make more sense. Their own money and being able to manage it themselves will make your child's learning more engaging. The lessons will also be more likely to stick with them into their future lives too.

By teaching your children practical money lessons at a young age, they will be able to learn and develop healthy money attitudes. Knowledge and skills that will stick with them into adult life, and put them in good stead to be financially healthy.