Thursday, 11 August 2016

Tips for teaching your children about money

Money has a huge influence on our day to day lives and how you handle your finances can impact your family’s quality of life. Teaching your children all about money early on, can prepare them for adult life and the big wide world that is forever changing.

But when exactly is the best time to start teaching your children about money, and what are the best ways to approach it? The credit experts at icount have offered up their advice, to help the younger generations get money-savvy.

When should you start teaching children about the value of money?

We recently conducted a survey amongst 1000 UK parents with children aged between 1 and 18 years old, to find out when they thought the best age was to begin teaching children the valuable lessons of money and finances. The majority of parents agreed that the basics should be taught when children reach ages 5-7.  

How to approach the task of getting your children interested in their finances

If you choose to start your children’s learning early, it’s important to keep it interesting and exciting for them. Money and finances aren’t the most intriguing of topics for children, so why not try out a few of the below, to get your children into the savings spirit.

Have them make a list of what they would like

Children love new things, whether it’s a toy, a bag of sweets or even a pet! As parents, we often get lured into buying our children all kinds of treats, which is of course absolutely fine, but we also need to be teaching them the value of money and the treats they are receiving.

Have your children write a list of everything they would like to be bought, then sit down with them and discuss the cost of each item on the list. Doing this will begin to make them realise the difference in prices between certain things, and that everything has a value.

Start giving them pocket money

Rewarding good behaviour or completing jobs around the house is a great way of introducing your children to the world of work and how we accrue money. Help them understand that pocket money can increase over time, if they continue to help around the house, similarly to receiving a promotion at work.

Sit down with them to discuss spending, saving and budgeting

Offer advice about how much of their pocket money they should spend and save, in order to eventually be able to buy the things that they want from their list. Allow them to set their own budgets to see what they can get for their money with each pocket money installment - much like we do with our wages.

Buy a money box to begin with, then open up a bank account of their own

Your children will love seeing their savings increase, so invest in a money box of their own, where they can accumulate all of their savings. Once this is full, why not open up their own bank account? Making regular trips to the bank each time their money box is full will not only will them with a sense of pride, but will keep their savings safe, too.

Make savings into a game

Read through their bank statements with them and every time they reach a “target” amount, give them “interest”.

Take them shopping

Before they begin to buy their own things, why not take them on a food shop? There they can learn the differences in price between one thing and another, as well as the total cost of it all. You could even let them pay at the till under your supervision, to begin understanding how money changes hands.

Finally, be a good example to them

As parents, your children will be greatly influenced by how you act and manage certain aspects of life, with money being one of these things. Be sure to manage your own finances well and your children will learn greatly from you.

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