Kids and finance- what does this mean?
I know many adults think this has nothing to do with kids, but I disagree. I am not advocating that we burden our children them with the specifics of our personal finances. However, I do believe that we should empower them to understand the value of money and surely this is part of understanding numeracy and mental arithmetic. Teach children about money so they can be empowered to budget and take responsibility for what they spend and how much they save. With rising university fees and credit cards becoming a way of life, it is important that young children understand the value of money. Andrew Morrison of Glasgow based accountancy firm Martin Aitken & Co, warned: “If we don’t teach our children about basic personal finance, we will spiral downwards in a vicious circle of indebtedness, social injustice and consumer debt.”
- Set up a savings account for them and let them deposit money, track interest and save for a special item or event. This will also help them in the future , as when they get older they can show that they have had an account for many years which may come in useful for a mortgage!
|Get Children To Look For Savings|
- We can take them shopping and get them to look for bargains or special deals that will save the family money.
- They can keep a record of their savings on a spread sheet or on Microsoft word.
- We can discuss with them how much it cost to make a product and the mark-up price.
- Give children a certain amount of money to spend when you go out – a budget. Explain to them how it works and that they do not have an inexhaustible amount of money. Children do not understand that a budget needs to be kept – they believe you just go to the bank and get more money!
- Encourage your child to do chores in order to earn their money. They may only be a small chores, but if you give suitable monetary reward for their age, this will foster an understanding of the value of money.
- When you go to an event, such as a fair or a fete, give them a small amount of money so that they can pay for some items. Yes, they may well lose it but this is all about being responsible and learning how important it is to take care of money. Explain to them approximately what they will be able to purchase with the money that you have given them.
- Another tip, that I heard from a parent recently, is to get your child to calculate their change before they make a purchase, so that they know how much change they will be given back by the cashier. If they need help with this, do assist them. This is a good habit for children to develop as they should always know how much change they are going to be given back.
- Purchase a piggyback and get them to save their coins for comics, books, toys and games.
Start teaching your kids about money today and give them the gift of having manageable debt when they get older.
Have a great day