DO as I say, not as i DO!
Set a good example for your little ones, with just a few simple changes.
As a parent, I’m sure you try to ensure your children have the skills to make smart financial decisions. You know, the things you wish your parents had told you about. Maybe you’ll tell them about the importance of savings or the power of compounding interest! But did you know that you could be sending them negative money messages without even meaning to?
Here are four common ways you could teach your children healthy money habits.
1. Reveal the magic behind digital money
Your children have likely seen you pay for hundreds of transactions without glimpsing cash changing hands. For smaller children, it can seem like money problems are solved with magic – just tap a plastic card and the goods are yours! This makes it vitally important to discuss the value of money with them. A good way to start is to explain how your earnings get deposited into your bank account and how you use this account to pay bills. For older children, consider showing them how taxes are deducted from your salary. Helping them understand how long you need to work to cover the groceries could be of interest. If you’re on $30 per hour, it could take 7 hours to feed your family. That nearly a full day, just for food!
2. Spend wisely
Frequently buying things on an impulse could send the message that it’s fine to spend without planning. Sticking to a budget is key to avoiding impulse-buying.
To set an effective budget, consider working with a professional financial adviser or even investing in an App. Your adviser may help develop a budget that factors in your income, expenses and financial obligations. Staying on top of it daily with some assistance from your App can help keep you on track to train the kids and kick some goals.
3. Teach them independence
It’s convenient in those early years to do everything for your children. Seriously, it’ll take much less time, but by giving them a chance to have their own money and decide how and where to spend it, they could learn powerful lessons about budgeting.
For older, even adult children, always offering them financial help can create a cycle of dependency. Letting the wee dears make their own money decisions could just help them develop financial responsibility and realise that the Bank of Mum or Dad isn’t always going to be open for business.
4. Include them in budgeting
Many parents keep household financial planning and budgeting to themselves, if they even do it. While you don’t have to fully involve your children in managing all your family’s finances, giving them a role to play, such as getting them to do grocery shopping using a set budget, can teach them lessons about money.
If your children are old enough to earn some income or pocket money, why not get them to pitch in to help achieve a family goal or save for their own spending money for the next holidays.
Use your influence positively
You can strongly influence your children in relation to money, so it’s important to pass on smart money management skills.
If you don’t know where to start, consider reaching out to this financial adviser to help you stay on top of your finances through proper planning and budgeting. I may even have some tools to share, so feel free to ask!