Tips For Teaching Financial Skills To Your Children
Teaching children to manage their finances can be a difficult job, but it's one that many parents take on every day.
If you're not sure where to start, here are some helpful tips for teaching financial skills to your children.
Start As Soon As Possible
Many parents don't start teaching their children about finance and money until they reach their teenage years. However, the earlier you begin the process the better because by starting young you're allowing your child time to learn at his own pace and develop good long term habits.
Use Everyday Situations To Your Advantage
One of the best ways for children (and adults) to learn about personal finance is by using example scenarios. When you're out shopping with your child, ask them if they think it's a good idea to buy the chocolate bar in front of them or if they think it would be better for them to save up and buy the toy that they want instead.
Let Them Make Decisions
One of the biggest mistakes that parents make when teaching their kids about money management is telling them what they should do instead of letting them make their own decisions. Children need to have a chance to test their financial skills so don't take that opportunity away from them just because money is involved.
Read Articles Together
If your child enjoys reading, perhaps you can read an article together at bedtime and discuss what they learned. There are many great resources out there where you can find articles that are geared towards children.
Don't Interfere With Allowance
One of the biggest mistakes some parents make is interfering with their child's allowance. Money is an important life lesson so it would be unwise to take away a portion of your child's allowance even if they decide to spend it all at once on something frivolous. It can be beneficial to let them make mistakes; they may think twice in future scenarios.
Model Good Financial Behaviour
As important as the financial lessons you instil in your children are the methods in which you communicate and handle money with them. For example, if you moan about having to spend too much on something such as rent and then take your children on a shopping spree, you're sending conflicting messages.
Instead, make sure you model the behaviours around money that you want your children to adopt.
If you want your children to develop good spending and saving habits, they need to see you making smart spending and savings choices. In short, practice what you preach and preach with consistency. Educating your children about personal finance is a process that can take time. But if you put in the effort and continuously communicate a clear message about money, you will instil good habits that will serve your children well for life.
Teaching kids about money management doesn't have to be difficult. As long as you're consistent, patient and use real-life examples, your liveschildren will catch on quickly and develop good financial habits early in life that will stay with them for the rest of their lives.