Whether they’re teenagers or younger, you should always be seeking to give your kids advice and wisdom about money matters. A lot of parents do it without realising, whether it’s telling your child to look after his money, or you’re saying they can’t buy a particular toy because it’s too expensive. All of these things shape a child’s views and opinions when it comes to money, so it’s important to be careful what you say and try to help you child because wise in the world of finances.
- Teach them the value of money
Never teach children that money isn’t really worth much, even if you are earning a lot of money and can afford almost anything you or they want. Teach them that in some countries, most people can’t even afford to buy a meal each day, and a few pennies in this country could feed a family. This will also teach them to look after their money carefully and not be careless with what they do have. Give them simple facts and figures such as: If you saved a dollar a week, you’d have $500 by the time you’re [the child’s age in 10 years from now]. Figures like this will amaze them, and they’ll realise how small amounts of money will soon build up.
- Show them things through examples
You can teach your child things by giving them examples and showing them rather than just telling. You could open a bank account for your child and get them to put money in it from a very young age. Over the years, you’ll show them how saving money works and how they can have a nice lump sum of money when they’re older if they put little bits aside and into the bank account now. If you want something a little more short-term to teach them about what money can do, show them some pennies and tell them what could be done with this. You could also start a little project with them to encourage them to pick up money from the floor, no matter how small. Put everything collected into a jar or pot and count it at the end of the month. They’ll probably have enough to buy a bag of candy or a small toy!
- Teach them about debt and credit cards
You should teach your teenage children about debt and credit cards, since they’ll be able to understand it quite clearly and they’re also approaching the age where they will be eligible to start borrowing money and using credit cards themselves. You should tell them about interest and how it works. If you’re good at Mathematics, show them some quick calculations about how much interest is earned on a particular amount of debt, and how this amount rises quickly if the money is not paid back within a certain amount of time. The longer the money is not paid back, the more interest it will earn and the more they will have to pay back in the end. Show them top 10 reviews of products which can help them to stay out of debt, for example, apps for their mobile phones which will help them to budget their finances carefully. If you’ve had bad experiences with debt, tell them about these in the hope that it will discourage them from going into debt themselves.
- Teach them about working hard
Tell your children that money is earned by hard work, and they shouldn’t expect to just be given money simply because they need it. This is one of the reasons why parents are encouraged not to spoil their children and give them more cash than they deserve. Children learn through what they see, and they shouldn’t grow up believing that they will always be given money even if they don’t deserve it. You could start by telling your child that they will only get pocket money if they do some chores around the home. The amount of money they get will rise with the amount of work they do. This will encourage them to help out around the home too, but it’ll also teach them how money is earned through working hard.
- Talk to them about charities
As well as learning about earning money, your child should also learn the importance of giving money. Bring your child up to be kind-hearted and generous with money. Tell them that while we need money for ourselves, there are other people who cannot get money and need it to survive too. Encourage your child and advise them on how to give charity donations safely – this will help him to earn some money and also give to charity in order to help others.
- Encourage your child to open a bank account
It’s a great life skill to understand bank accounts and know how it works. If your child doesn’t have a bank account already, open one for him or get him to open one himself if he is old enough. By doing this, he will be able to learn about interest rates, saving money, the different types of account, how to withdraw and deposit money and how to pay for things using a debit card. In later life, he will be able to use the bank account when he gets a job or if he takes out a mortgage for a new home.
- Teach your child to protect money
Tell your child that there are people out there who will steal money and act fraudulently in order to get money. They should never be encouraged to purchase things which seem fraudulent, and tell them to always be wary when purchasing things online and signing up for various things. People in the street may stop them and ask them to sign up for different things, and there may be leaflets through the door which want money from them. Remind them too that while a lot of people collecting money for charities are genuine, some of them are not. Tell your child that the safest place to save money is in a bank account and not in the house and under the bed. In the case of a fire or burglary, at least your money is safe in the bank, whereas it’s not if it’s lying around the house or in a car.
- Teach your kids how to make a budget
Making a budget is probably one of the simplest and easiest things that you can show your kids. Start from an early age and let them budget for themselves. Give them a little bit of money for the week and tell them that they have to manage it. Tell them what it needs to be spent on, and help them to make a plan. Tell them that with the money they have to buy some food, drinks, one toy and they have to save some of it. At the end of the week, see how well they have been able to stay to the budget, and discuss it together and look at ways to improve. This will be a very fun activity for your child, and will also teach him a valuable lesson.