How to teach your kids to be money smart
Have you had the conversation yet with your children about creating good money habits?
Plenty of parents say they have missed opportunities to talk to their kids about money and finances whilst growing up. A quarter of parents say they are reluctant or extremely reluctant to broach this subject with their children due to uncertainty around their understandings. We know each parent wants the best for their children, but that does not mean they need to provide them the latest toys, gadgets or labelled clothing. Having conversations about money habits provides them with an education and a foundation that they they can build on to do well in life and to ultimately, feel safe and secure financially for their future.
Providing the gift of financial literacy to your children can be as easy as you make it. Here are a few tips to help you help your little ones create good money habits: some tips to achieve this with your little ones:
Start with the basics from a young age
When you speak with your children, explain to them what money is, how it is used and that it does not come for free.
Instil a habit of saving
Use a method that will allow your child to learn and be rewarded at the same time. For example, complete certain chores around the house and earn ‘X’ amount, but save half and let them keep the other half to spend on what they like. Let them know that it is good to save money and build for a future.
Help them learn to make smarter spending decisions
Let them know that spending isn’t always about buying things you want. Teach them that there will come a time they need to spend money on things they need.
Show kids the value of giving
The value of giving and showing your children they can provide to their community or support a cause they care about.
Teach them how their money can grow
When your children save their money, it will teach your kids how to truly build wealth, show them how it will grow and what exactly it could potentially earn.
Model a good financial behaviour around them
Careful to not send mixed messages with the way you’re spending your money in front of them. Display actions of how you want your children to adopt your financial behaviours. They need to see you making smart spending and saving choices to educate them over time to make the right or better choices with their money.
We hope you find these tips helpful as you teach and model good money habits to your children. If you have any questions, feel free to ask your adviser.