Education is the best it’s ever been, more and more kids are accessing a school education and many of them are going on to study at universities. However, our society falls short in at least one area of education and that’s money management. Numerous teens, from all social groups, are finding themselves in financial problems: a giant, intimidating student loan, car debt, credit card debt and the list goes on. Without the proper guidance it can be near impossible for a child to learn good money skills. Here are some tips to teaching your kids how to be good with money:
Take Them to The Bank
Take your kids to the bank and set them up with a savings account from a young age. Choose a bank that offers good banking rates for children. If you’re in Australia, Visit NPBS and check out their competitive saving plans. Taking your child to the bank can be a great experience for them and opening up their own bank account is a special right of passage. Encourage them to save a certain amount of their pocket money each week and insist any of their big purchases come out of their savings account.
Let Them Know About Money
Too many parents shelter their children from money issues, never mentioning when money is tight or something is slightly out of their budget. This gives children the impression that money has no limits and will always be there. It’s good to take your children shopping at the supermarket and when the bill is more expensive than you expected, let your children know you’re going to have to reshuffle your budget because you spent too much money on the groceries. Don’t stress your kids out by always bringing up money, but here and there you should let your kids know it’s not a infinite resource.
Pay Them a Pocket Money
Kids of all ages want stuff, toys and especially as they become teenagers, clothes. Often these things are “wants’ rather than “needs”. Giving your child a suitable allowance to ensure they can pay for some of their wants out of their money is a great way to teach them budgeting and the reality of having to choose between things, rather than getting it all. Delayed gratification, in terms of saving, is another good way to encourage good money skills as it teaches your kids that it is possible to save for expensive items.
Ensuring your children are money smart is a great move and will probably save you money in the long run as you wont have to bail your 25 year old daughter or son out of overwhelming credit card debt. Invest a little time to reap the rewards later!