According to a recent survey by Scottish Friendly UK disposable incomes on the rise, which can only be a good things after such a period of recession. (You can find Scottish Friendly on twitter)
We were listening to the news on the radio whilst in the car at the weekend, when Mini asked “what is a recession?”
This got me thinking that money really has a terminology and language of all it own and it is my responsibility as a parent to teach this to the boys and to make sure that they are money smart, but how do you do that?
Table of Contents
Start talking to your kids about money at an early age
Explain to your Kids why you work, so that you can make money for the family. Explain that the items they use each day all cost money and you must work to make and save enough to make sure all things are paid for. From an early age if you asked the boys why their Daddy went out to work their response would be “to get pennies” . We also explained that a bank is a place that keeps money safe.
Give them practical money lessons
The best way to teach kids to start managing money is to give them some. If they blow their pocket money on the ice cream van and don’t have enough left for later in the week, that’s actually a good thing: They learn firsthand the consequence of overspending.
Another way to do this with older children is to get them involved with the family shopping budget. Get them to make the list and give them a budget to spend to get the shopping.
Model good habits
Make sure you set a good example for your kids. Let them see you making smart decisions about money. Be a role model,Let them see you have a savings account and how you shop wisely. Show how you set up a budget and stick to it.
In addition to disciplining yourself to use smart money habits, make sure you point out to your kids how those habits work in your day-to-day life. You have a budget and spending priorities. So should your child.
Talk about money
Money should not be spoken to in hushed tones or b e a dirty word. Make sure you talk to your kids about money and finance. Talk about your work and how your salary is based on the work you do. Show how your earnings reflect the health of your business and the economy. If your family is enduring a difficult time, find a way to talk about it an age-appropriate manner.
Good Things Come to Those Who Wait
Delayed gratification is one of the hardest money lessons I think. I want to avoid that “buy now, pay later” mentality that could mire the boys in credit card debt later on. So, as much as I can, I reinforce the idea that waiting pays off. But remember that postponement of pleasure is a grown-up characteristic, learned from grown-ups.
Great tips Jen, thanks for sharing. X
This is why pocket money is so great: “You’d like some new Lego? Ah, shame you spent it all on sweets… Never mind, you can buy it next month!” 😉
Great idea… mine find it hard to realise the value of things and that it doesn’t in fact grow on trees!!
I’m a qualified independent financial adviser so my kids have always known the value of money. My daughter used to sit in the trolley and say, “It’s not on offer so we can’t buy it this week!”
Really helpful tips, thank you.
My son turns 6 next month and he was asking for an XBox for his birthday. We said no. We talked to him about all the things he couldn’t have if we spent that much money on a single item. So no trip to the seaside, and no Lego movie on DVD, or micro scooter. He agreed that he could live without an XBox!
Some very good tips for when my kids are older .x
My 4 year old is becoming interested in money, I hope he is always this inquisitive about things.
You always have great tips. I’m trying to figure out now how to start explaining money to my three-year-old.
Some really great tips here, this is something I really need to think about with my three.
Totally agree with all of the points you have made, you can never be too young to learn to manage your finances x
Some great tips here – my eldest (who is 3) has just started to ask about money !
Great post. And I think it’s brilliant to get children involved in money and to understand the value of it at an early age.
Great tips, I’ve started getting my son to save money and I try to talk to him about why it’s important – ‘yes you can buy a toy now but it won’t be very good so keep saving so you can get Batman!!’
I’m teaching my son about money too. His dad made the best effort possible to make him think that money grows on trees and since we separated it’s been really hard to explain to my son, that it really does not.
These tips are great Jen. I had a very frank conversation about how much it costs to run our house the other week after the difficulty we’ve had getting him motivated. To my surprise he had no point of reference about how much a mortgage might be. He does now!
Max is a little to young at the present moment to learn about money but being good with money is a life lesson I want him to learn at a young age.
I think it is a great idea to talk openly with children about money. Having some themselves to spend within a budget is a great way to teach them how to manage their own finances. Thanks for the fab tips 🙂
For the latter 2 years of Aaron’s 4 year old life so far I have been a SAHM. Pre-redundancy money wasn’t an issue but now I talk about it a lot. I’ll say things like “you can have 1 not 2” or, “it’s not your Birthday or Xmas so you can’t have it” and lots and lots of other comments relating to money. I hope it’s all giving him a healthy respect for money and finances. This is a very helpful post thank you xxx