Five tips for talking to your kids about money
Teaching your kids about money early on is a great life skill and necessary to help kids to understand that money doesn’t grow on trees, and ATMs aren’t magical. Follow our easy tips below to start teaching your kids about money the right way.
- Money is finite: By giving your kids a small allowance, they will learn that if they blow it all on the latest cool toy, they won’t have any money left later on for something they might want more. This way, they learn firsthand the consequences of overspending. The biggest tip here is not to give in and give them more money when the inevitable tantrum comes, and instead sit down with them and explain how things could have been different if they had saved their money.
- Keep a chore chart: Creating a chore chart for your kids, with amounts of money tied to each chore, will help teach them that money has to be earned by hard work. By having a chart that they can tick chores off of each week, with a running total of how much they’ve earned, is great positive reinforcement and can create some healthy competition between siblings.
- Delayed gratification: Teaching kids about delayed gratification is an important skill for them to learn. Most kids have a “buy now, pay later” mentality which could get them into serious financial trouble down the road. Teaching kids that waiting pays off can be done in a few different ways, but the easiest way is probably cooking. Making a batch of cookies together from scratch takes longer than buying a packet from the shops, but they taste much better in the end.
- Saving towards a goal: If your child has a new toy in mind that they really want but it costs more than their allowance, teach them how by saving their monthly allowance and doing some extra chores around the house, could give him or her the money for the toy. Once they have enough saved up, take them shopping so they can feel great about getting a reward for saving. Even if your child doesn’t have anything in mind they want to buy, you can make a wish list together, prioritise each item, and figure out how much allowance will be needed for each item. This also teaches valuable budgeting skills, as well as prioritisation.
- Be skeptical: Advertising on TV can be incredibly alluring to children and make them think they absolutely need the thing they’re selling. By pointing out sales tricks to your kids, it will give them a healthy amount of skepticism to avoid impulse purchases based on ads.