Most of us would admit that our finances could use some improvement. We weren’t brought up with good money skills and that’s what makes teaching our kids about money so challenging. But even if you don’t feel like a money expert, don’t be discouraged. Whether you realise it or not, you have acquired a lot of money wisdom you can pass on to your children to give them a good start in life.
Talk about money
Explain to your children what money is as soon as you can, as well as the different forms money can take – cash, credit cards, bank deposits. Let them watch you pay at the shop and later outsource the payment to them. They’ll love it and they’ll get to practice their maths, too.
It’s also important to teach them where money comes from (it’s not from the ATM, like my son used to believe). When children understand that people pay you money because you have contributed in some way to make their lives better, they see money as a fair exchange rather than endless supply.
Play money games
Kids love to play shops. Parents use this game to teach their kids new words, but it’s also a way to model money transactions. My kids have a price list for all kind of items they sell at their shop and we use play money to purchase them.
Monopoly is a great game for older kids. It will take their understanding of money to a new level and it’s fun to play for adults, too.
Take the kids to the bank to open their own savings accounts – it will make them feel all grown up. Have a piggy bank at home, too, for easier access. When they receive money, remind them that saving it (or part of it) is an option and that not spending all their money immediately will help them buy bigger things later on.
Allow buying decisions
Let your kids take responsibility for their own spending every now and then. You can discuss with them the pros and cons of each decision, but leave it up to them, even if you think they’re making a mistake. Sometimes mistakes are the quickest way to learn.
Work on your own money skills
When you’re getting better at saving, budgeting, managing your debt and making the most out of your money, you’re modelling these money skills for your children.
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