Everything I want my kids to know about finances, budgeting, saving, investing and creating a future that will give them financial independence, they won’t learn at school. I’m taking full responsibility to teach them the basics around these topics at a young age and continue to educate them as they get older. And I hope that by doing this they have a great money mindset and can go on to create incredible lives with endless opportunities.
As kids grow so will their knowledge about money, but there are a couple of things you can do to help with their understanding and assist them in making good decisions when they have it. If they develop good financial skills from an early age they will be better prepared for the financial challenges that we all face as adults. Here are a few things I do with my kids:
1. Pocket Money
Receiving a weekly amount of money in exchange for helping with small tasks around the house. The tasks should be age appropriate with each one being worth a certain amount of money. It is entirely up to them if they want to work for it or not.
I find that this teaches kids about goal setting (if they are saving for something), effort for reward and promotes independence.
2. Handling Money
Encourage your kids to handle their own money after the have earned it. This means counting it out and physically taking it to the bank or shop themselves. This process gives them an incredible sense of ownership and responsibility for their money.
3. Savings and Goals
As adults, we have goals. There’s no reason why kids can’t have goals too. When they find something they want, rather than just buying it for them, talk about making a plan for them to buy it with their own money. Your kids can find a picture, cut it out, stick it on the fridge and be excited about working towards it. As your kids get older, their goals will change. But what is most important is the fact that they believe anything is available to them if they have a plan to make it happen.
4. Talking about Money
Talk as much as you can about money so that your kids are familiar with where it comes from, how you earn it, how you access it etc. The key to this is to always talk about money in a POSITIVE way. This will lead to a great money mindset as they grow up. If you are always talking about the lack of money you have and how you can never afford anything, this is exactly what your kids will grow up believing too.
5. Lead by example
Monkey see, monkey do!!
When it comes to money, our kids will do what we do and learn from us well before they learn the realities of the real world. Love money, and they’ll love money. Resent money, and so will they. Try not to place the pressures that you face with money on your children. They’re kids and it’s not their fault.
Kids will have varying levels of understanding at different ages so make sure that whatever you’re doing to teach your kids about money suits their age and always, always, always have fun with it!