Knowing when and how to teach your children about finance can be tough. Sitting them down can prove ineffective as they’ll immediately associate it with school and indeed boredom. This is why as a parent you need to make financial education fun and (if possible) interactive. Throughout this article we are going to discuss various ways in which you can teach your child about finance and at what age you should start teaching them.
Building the foundations
Even as early as five years old, you can start teaching your child about the basics of financial management. Naturally it’s going to be extremely dumbed down but topics like; spending, saving, budgeting and earning can all be covered off.
A great place to teach your child the basics is at the supermarket. Simply show them things like; how much each item costs and how much money you spend altogether, you could even give them a calculator and let them add up each item as you’re going round.
Giving your child a piggy bank can help to teach them about saving, simply put some loose change in there every so often and get them to add up how much they have altogether. This is a great way of showing them how long it takes to save up enough to buy an item they want.
Another great thing to teach them at a young age is about need vs. want. Tell them from your point of view what you want (e.g. a sports car) but explain reasons you can’t because you need to pay for things you need to live (e.g. food etc.)
Whilst you are teaching your child about finance you can also teach them some important life lessons regarding generosity, giving and earning. Get them to choose some toys they no longer need and give them to charity; teach them how this will help those who are less fortunate.
From a young age you can give your child a perspective of the value of money. Show them the price of a toy they want and compare it to life essentials such as the food they eat on a daily basis or even the mortgage that gives them a roof to live under.
Between the ages of 8 and 12 is an ideal time to teach them about the basics of budgeting and financial goal setting. By swapping their irregular pocket money for an exact weekly or monthly allowance will help to develop their financial management skills and teach them how to make money last throughout the whole week.
Going forward, you can give your child the chance to earn extra cash by doing jobs around the house, this will teach them about the principle of working for a living and give them the motivation to go out and get a job from an early age.
At the age of 13 to 15 you can encourage your child to go outside of the comfort of their home and help out around the village. Jobs like mowing lawns, gardening and babysitting for friends or family teaches them responsibility and the importance of doing a good job.
At the same time you can also teach them a few credit concepts such as how credit cards and loans work, when you may need to take out a loan along with the importance of paying bills on time.
Teaching your child the basics of financial management from an early age is important. Without this knowledge of earning, saving, giving and goal setting they may find the financial learning curve rather overwhelming as they go out into the big wide world.
This article has been written by Jason Scott on behalf of https://www.guarantorloansonline.co.uk