Teaching your children about money is topic that gets revisited now and then with stories that make it to prime time news or go viral on social media. While it inspires parents to want to start off, the uptake, in general, has been slow. It is perhaps an indication that how a parent thinks and acts about money is the way their kids take up the same principles. As psychologists and counselors continue to tell us, by the age of three, a child has already developed much about how they see the world. Therefore, teaching them money management is a personal development tool that they will carry with them well into retirement.
How then do you raise your children to be smart about money in a way that benefits you as well?
Saving with your child
Piggy banks are perfect for teaching children the hard concepts of banks. To make it basic, you can be saved together. Make it a habit of taking 10-30 percent of their allowance and putting it in a piggy bank that they cannot access for long periods of time. Depending on your intentions for them and their needs, they can use it as savings to get something they want or to go towards their future. As you do this, take an equal (or more) amount and put it in your bank. That way, you can both cash out at the same time. It both teaches your children the satisfaction that comes with savings, and you get to save too, albeit in smaller quantities.
Teach the concept of invisible money
A child in their early stages will associate the card with getting things and not get the concept of money. If you don’t have a piggy bank, the concept will be even harder, and therefore you may want to use the previous point as the basics. They can then form the basic capability of understanding that the card is more than a means to an end. It holds money that, behind banks, gets exchanged between businesses and people.
Keep a strict budget
When going to the supermarket, where you can, give your child money and have them purchase their favorite treat. You can custom make it to your budget; a Toronto GST Lawyer and a high school teacher might not have the same needs. That will teach them the ability to prioritize. Then, next time they throw a tantrum in the supermarket, remind them that like them you have to prioritize because you don’t have an infinite source of money. Taking a groceries list with you and purchasing only the times on the list shows them this principle.
Being disciplined about your own money is what makes children responsible. Children, especially when very young, are fantastic imitators. Being mindful of that make you keep to make better choices.