In 2019 it’s incredibly important to teach children how to look after their own finances, it can start from a very early age and continue right until they leave home to look after their own homes and financial situation. ‘Pocket Money’ has a place in this and is a great tool to help children learn about money. But is it enough? Or can we do more to educate our children and make sure there is a healthy future for them no matter what?
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There are many ways for a child to earn their pocket money and gain a real sense of pride in their own money management. Of course, children are still learning and will take a while to settle into a routine. But be prepared to see them make a few mistakes during this adjustment period, such as spending money on things you KNOW they will regret. But they won’t learn the valuable lessons available from a situation like this if we step in and prevent the situation arising every time!
Of course, knowledge is power and for a child to understand exactly how money works, how businesses earn money, pay staff and run the whole thing, will undoubtedly give any child a great understanding about how large and small businesses operate. From a Summit Financial business loan to the basics of sales, a full overview at an age-appropriate level is the best starting point. There are plenty of resources online so utilise them as much as possible, find the ones with the most positive and informative messages and sit with your child to go through them all and allow your child to ask questions.
When it comes to earning money, it’s a great idea to encourage your children to save up for something special, getting into the habit of saving towards a goal is an incredibly valuable lesson. This one comes with a great sense of achievement for the children and will set them up for life if they can learn to be patient and reach their goals. This is an excellent gift for a child as it will teach them to value money and start them on the road to being great at money management. The ideal scenario for this one is that the child sets up a small contingency account to make sure any emergencies crop up are covered. Then the next time unexpected cost crops up your child can just access the funds and help out!
Teaching a child how to write up a little budget for themselves is easy, it’s as simple as giving them a certain amount of money per week and seeing if they can make it last until the next ‘payday’. You can set this up either digitally or on paper, but whichever way you do it try turning it into a little game or challenge for them. Maybe the person that sticks to the budget the closest in the family wins a small prize? So many people struggle daily with a budget because it isn’t taught in schools and many parents aren’t sure when it comes to sticking a budget either, so learning this new skill together is going to help everyone.
Set an example
This is a big one because we are the most significant teachers we’ll ever get for our children at the end of the day. There’s no way you can expect your children to be good with money if you’re making bad decisions left, right and centre. Share your wins with the children, explain to them about what exactly it is that is going well. Talk to them about the things that aren’t so great about money management, and how you can learn from them. It sounds intense, but depending on the child’s age, a lot of positive and enthusiasm will get you thought these discussions. In addition to this, working often will always make a good impression of work ethic, too, which is a win-win situation.
So if you are terrible with money, it’s worth working on your own budget and savings, allowing the children to see what that means and how quickly it can gather momentum. There’s nothing more inspiring to our children than to see us learn something new and include them in it. Managing finances can really be a great start to your children becoming independent, and able to care for themselves one day! Plus it’s sometimes a learning curve for the whole family to join in on, and even the most reluctant person will be a money-saving pro after some practice!