Wednesday, 20 February 2013 13:23
If you’re not knowledgeable with your own finances, this is the time to educate yourself. It’s never too soon or too late to begin talking with your children about money. Don’t know where to start? Begin with books written by people known for helping others with financial success. The sooner you get your finances under control, the sooner you’ll be able to lead your children by example. Remember, actions speak louder than words.
Here are four tips for teaching your kids about money:
1) Keep it age appropriate: The current economic situation makes it difficult to hide conversations about money. If your child happens to overhear your discussions about finances, remember to keep your explanations in a language they understand. It may be best to refer to a bank account or ATM as a piggy bank when speaking to younger children. When your child is older, tell them mall money comes from working (in their case an allowance from chores). Remember, it’s okay at any age to tell your child they can’t have the newest toy or overpriced t-shirt because it doesn’t fit into your budget. Even though it may be hard, you’re setting an excellent example on how to set boundaries and stick to your budget.
2) Play games: Kids learn best while they are having fun. This opens doors for fun and creative ways of teaching them about spending and saving. Games such as Life and Monopoly are great for sparking an interesting conversation about money. If your child is old enough, you can even tie your personal experiences into the game.
3) Work pays off: Money doesn’t grow on trees, and it’s important your children know that at a young age. Younger children can earn money by setting the table while older children can mow the yard and eventually hold a part-time job. Not only are you teaching your child what it means to earn a dollar, you’re also teaching them to follow through with tasks and be responsible.
4) Stress the importance of saving: We’ve all had situations where we regret not saving. Why not teach the lesson to your children, but without the reality of stressful consequences? For this, we can refer back to allowances. Tell your child they are free to spend their money as they please: they can buy that candy bar now, or put the money aside to buy the video game later. If your child chooses the candy bar, they will likely regret the decision. They will eventually learn the feeling of accomplishment from saving will overshadow instant gratification.
Check out FOX 59’s BottomLine segment on kids and money with FORUM’s own Andy Mattingly. Click here.