VERY few parents are looking to teach their children about money.
Maybe, they think it’s not important to raise kids who can think smartly about finance.
Unfortunately, many of these parents also don’t have good money habits to teach their children. This means children only see the suffering caused by overspending and too much debt.
Marlies Kappers, head of marketing at financial services provider, DirectAxis, said parents should play games to teach children to save.
Do you need it?
You can help kids learn the difference between wants and needs.
Rather than telling children you’re not buying them something “because we can’t afford it”, say that you’re choosing not to spend your money that way.
Understand the value of money
As they get older, you can teach them lessons about the real world. Ask them to help you do price comparisons between similar items in the
supermarket and explain why you chose one brand over the other.
You control your pocket money
Pocket money is a key step in teaching kids financial responsibility. If you give them some money every time they want something, they may struggle to grasp the value of it and the basics of budgeting later in life.
Start by paying your kids’ pocket money on a specific day once a week.
Money is earned
Building on the lesson about understanding the value of money, children should be taught that pocket money is earned, not given. They can earn it for doing household chores like making their bed, tidying up their room or feeding a family pet.
Learn to save
The rule of thumb is that you should save 10% of what you earn. You can encourage younger children to put away some of their pocket money in a piggy bank each week.
Teach money management
If they want a toy, gadget or fashion accessory, explain how they will need to save for it.
When you pay pocket money, look at the previous month and explain what they did well or how they might have spent or saved their money.
Let them learn lessons
Suggest or advise, but do not dictate how kids should spend their money. Have room for disappointment. The big lesson they’ll learn is when they splurge on something and later realise it was a waste of cash.
