All parents want their children to get the best possible start in life. Get started by discovering the importance of teaching them finance skills here.
Money skills are vital for children to learn. The basics of budgeting, saving and managing their money will encourage kids to be more financially independent as they grow older. However, many young people are not being taught these skills and according to a report released last month by the Programme for International Student Assessment, the organization, which evaluated financial literacy among thousands of 15-year-olds in 14 countries, concluded that one in five teens lack basic money managing skills.
It is imperative for parents to have conversations with their kids about money to start a good foundation for financial literacy and help prepare teens for financial independence.
There are a few ways you can help your kids manage their money properly:
- Start as early as possible- Once your child is nearly able to count well you should start teaching them about money and how to add it up. It takes a lot of effort on your child’s part and it may take some time but persevere and show them how it works. Encourage your kid to pay for items and get a feel for understanding that everything should be paid for and of course, earned too!
- Teach your kid to save- Consider opening a little bank account for your child and encourage them to pop money into it from gifts or pocket money earned. Remind your kid that saving will mean they can afford something they love down the line and how saving builds up their money.
- Show them how bank cards work and pay slips- Maybe not for the younger kids but older nippers can be shown how bank cards work at the ATM or payment points in shops. To keep it balanced ensure your child knows where your money comes from and how it isn’t as easy as hitting buttons on a machine. When you have a payslip show it to your kid and look at the family budget plan to give them a full account of where money goes and how hard it is to make ends meet at times. Use a calendar to mark significant billing dates like mortgage, electricity and others allowing your kid to see these things may teach them about the future and bills but it also shows them how much their parents do for them.
- Be honest about past mistakes- No one gets through life without making a few financial mistakes and anyone that says they haven’t is lying. The truth is everyone makes errors regarding money at some point but it is vital to bounce back and move forward. Be truthful with your kids and encourage them to not make your mistakes.
- Get the kids to do odd jobs and earn money themselves- From a tot your kid can learn how to earn a few bob by doing their chores or getting a job when they are older. Earning their own money will mean they will learn how to mind their money, save and spend it.
Giving them these vital skills will ensure they are prepared for their adult life and the bills the come with it!
Written by Emma Hayes, staff writer with FamilyFriendly HQ