Lead by example
Kids watch your every move. It’s not enough to tell them how to manage money, and then let them see you do the opposite. Remember they’ll always be watching, and use it as motivation to make good financial decisions.
Cash not credit
Kids have less and less opportunities these days to see cash. Paying with debit and credit cards can make it seem like money isn't ‘real’. Show kids the cash you withdraw from an ATM and explain that when you take money out, you have less to spend later.
Their own bank account
Get your child involved in setting up their own bank account – take them into a branch and show let them the process of opening an account. Keep them across what goes into the account, and what comes out using online banking. You could try setting up a rule for money they receive for birthdays, pocket money or from a part-time job – they can spend half and must save the other half into savings.
Make a connection between work and expenses
Show them a household bill so they can understand where the money you earn goes. It’s not about making them feel guilty, just giving them an understanding of earning, spending and saving.
Talk to them about an electricity bill – and help them make the connection to why you bug them to turn lights and air conditioning of when they leave a room. Many kids will enjoy feeling part of the family finance team. Watch out… some of them will enjoy the responsibility of policing others not to waste power!
Budgeting for a special occasion
If they have a birthday party coming up, get them involved in working to a budget. Start by setting a realistic budget, and then make a wish list of everything they’d like for the day. Compare the wish list to the budget and help them narrow down their choices.
Learning to give
Even from an early age, showing children that others need help can help their understanding of money and encourage compassion.
Sit together and talk through what a charity does, and choose one the family can give to regularly. Try to make a visual connection for them on the difference that money is making to a real person. Encourage them to put your loose change in a charity tin when you’re at the shops, or spend some of their own money on a gift for someone doing it tough.
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