With the cost of living crisis, it's never too early to make sure your children understand money. Here are 7 tips for teaching your children about financial responsibility
We’ve all heard horror stories about kids who go off to university with shiny new credit cards and run up mountains of debt over the first several months. That won’t happen to your kids, thanks to these tips from Syble Solomon, the creator of Money Habitudes, a deck of cards used by educators and counselors to identify financial issues in relationships:
Show them money going in, not just out
If your kids only see you withdrawing those £20 notes from the cash machine, they’re going to think machines hand out money. Make sure they also see you depositing funds at the bank.
Teach them to set goals and save
Label a jar with a set amount of money to be used for something specific. Start small—say, £5 to buy some ice cream and sprinkles. Collect £5 worth of change in the jar and count it out before buying the treat.
"Start small—say, £5 to buy some ice cream and sprinkles"
Keep this money separate when you go to the store, so your child can buy the ice cream themselves with the cash.
Differentiate between wants and needs
You need shoes, but you want the trendiest brand. You need food, but you want to eat out. Apply this rule to anything you buy and to any of their requests for stuff.
Make choices, not sacrifices
Instead of saying, “We can’t afford that,” “That’s too expensive,” or just saying no, substitute a comment that expresses an intentional choice.
"Children will learn that life is about making choices"
Examples: “I want to stay home and visit state parks this year so we can save for a special vacation next year.” “I choose to bring my coffee [or water, or juice] with me and not buy it at the shops so I can save that money for more important things.” Instead of feeling that “no” means sacrifice, scarcity or embarrassment, children learn that life is about making choices.
Plan ahead with them
Show them you’re planning for the future. In addition to using a change jar to save for special treats, let your kids hear you talk about saving for a new roof, paying off the car, putting money aside to celebrate a birthday, saving for their education and paying bills on time.
Give to others
Along with that jar for ice cream, label another jar for charity. Make sure your children put a fixed percentage of their pocket money in it. And make sure they see you giving to others, whether it’s writing a check to a nonprofit, or volunteering for a charitable cause.
Turn off the shopping channel
Keep TV time to a minimum to avoid the “buy me” ads that dominate. Also point out the marketing tricks that advertisers use, and make sure your kids understand how they try to sell.
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