4 Ways To Get Good Money Habits Into Our Kids

Budgeting, saving and living within our means are all important life skills. And the sooner we expose our kids to these concepts, the better. And so whether it’s using pocket money, birthday cash gifts or a piggy bank, the more practice our children have at an early age, the better prepared they will be for adult life. In this article we share four simple ways that you can encourage your children to become money savvy.

Look After the Cents

With so many transactions taking place online or with a wave of a card, kids could be forgiven for thinking that money is on tap so get back to basics with coins and cash. Handing over a shiny gold dollar coin really does help kids to appreciate the value of money. And most kids are visual so having that piggy bank or jam jar in which they can see how much they’ve got and how even the cents add up to dollars is a great incentive for kids to save. In fact, why not have separate jam jars for spending and saving? And for older children make use of the many banking apps that are available which do the same job only digitally.

Display the Right Attitude

We as parents are the most important role models for our kids and they learn a lot from our attitudes to money. Usually our standard response to a request for a purchase is ‘we can’t afford that’ which results in the child feeling deprived. The reality is that more often than not we can afford it, it’s just that we choose to spend the money on other things. The important point to get across to our children is that when it comes to spending we’re in control. We choose what to spend our money on, but there are always competing demands and priorities. So make sure you model the right behaviour in front of your kids.

Make it Interesting

With low pocket money accounts, why not pay the kids five percent interest compounding each month? Your children will be amazed at how quickly their balance will grow. And it’s a very useful early lesson in the power of compound interest.

Introduce Invoices

This is a great way of engaging with older children and teenagers in particular. Incentivise your kids by getting them to do extra work around the house for cash. This helps to teach them that hard work and enterprise have their rewards as the more work they do, the more they will earn. And get your kids to invoice you once a week for all their efforts. This will teach them all sorts of valuable lessons in how the real world of business works.

Helping kids to have a positive attitude to money and a competency in managing their income and outgoings is an important part of being a responsible parent. Use this tips to get yourself started.