Teaching Your Children About Money
25 Aug 2020
There are plenty of things that we, as parents, need to teach our children about. We need to show them how to be a good person, how to treat others around us and how to be kind and considerate.
Other things that we need to teach our children about, but that we often forget, is money. Money is something that we all need in our lives, however, it can actually be tricky to manage and keep on top of. While debt is something that happens to most of us at some point, if we take the time to teach our children about money, then they should be able to manage their own money and their debt too.
But how do we start to teach our children about money? It isn’t always the easiest of subjects to get to grips with; so to help us to figure out the right approach to take, we have put together our guide to teaching your children about money.
Think about how you see money
The first place to start is by thinking about your own spending habits. You can never teach your child to have a healthy relationship with money if you are not able to do this yourself. Try your best to set a good example, think about what types of things you should be showing them and then adopt this behaviour. You may even find that you learn whilst you are teaching them.
Give them an allowance to spend themselves
A great approach to take with your kids is to teach them about spending money and being responsible with what they have. Give them an allowance weekly or monthly and tell them that this is what they have to spend on the things that they want. It doesn’t have to be a lot of money, just enough that they can then spend out on toys or treats. The main focus of this is that you teach your children that when they spend out on something, then this is all they have left.
Get them to earn it too
Rather than just handing over cash to your children, it is a really good idea to teach them that they need to earn their money and that money is a reward for hard work. Encourage them to help out around the house in order to earn money. Showing them that it will be beneficial to them.
Show them how to save
Sometimes there is going to be something that your child really wants, that is expensive or way out of the price range of their usual pocket money or earnings from their household chores. If this is the case, then it is a great idea to teach them that they need to save to buy whatever it is that they want. This will show them that whilst it is okay to treat yourself, you really need to ensure that you have saved up for it, rather than spending out when you don’t have the money.
Teach them to understand credit
Another key lesson that is good for your child to learn is how debt works. They may see you paying for things on a credit card, see you looking into DTSS Restoring America’s Freedom, or hear you talking about overdrafts. There is a good chance that without guidance, they may think this is free money. Teach them that borrowing money can be great when you need it, but that debt is something to take seriously and that they need to manage to stop it spiralling out of control.
These are just a few pointers of what you can do to help your child learn about money. So, why not see if you can show them how to be responsible with something that they will rely on later in life?