Ever found yourself faced with a financial conundrum, wishing you had been taught how to tackle it earlier in life? Whether it’s student finance, VAT, income tax or mortgage repayments, it’s safe to say that we have all felt slightly out of our depth at some point. Once we do finally get our heads around these things, we walk with pride having earned yet another stripe on the road to fully ‘adulting’. But the journey can be stressful, often delivering hard lessons along the way. So what can we do to help soften the blow for the next generation? For a start, we can equip children with the knowledge about how money works. Experts are suggesting that we should teach children about money as early as possible.
In hindsight, I’m glad that I wasn’t given pocket money just for the sake of it. I earned it by doing extra chores around the house. It taught me that money doesn’t just appear by magic, but had to be worked for. This is how the real world works for most of us, and finding ways to help children understand this from an early age will be of benefit when they join the workforce for real.
To spend or not to spend
Spending money can be a lot of fun and it feels good to treat ourselves. But unless you’re rolling in it, it becomes a conversation of whether you just want something or truly need it. If you can teach children about money, and why it’s beneficial to be careful with it, will help them massively in the long run. If they can get to grips with not necessarily having to spend all of their money in one go, it may inform wiser spending habits when they start to make money on their own. If they’ve asked you for something with a hefty price tag, encourage them to save and put something towards it. Better yet, loan them the money and draw up a simple contract of terms for repayment.
Teaching children about money needn’t be boring!
There is not much point sitting in front of young children with a flip chart and graphs, unless your aim is to put them to sleep! Learning about the principles of money can be fun, with games incorporated to make it more relatable for them. Whether it’s board games or music, the most important thing is to keep them engaged and wanting to know more. You want them to learn the basics, but not for it to feel like a lecture they want to escape from.
Be as honest as you can
Children don’t need to see your monthly bank statements, but it’s important to be honest if you find yourself struggling. As soon as they are old enough to comprehend, it’s good for children to know why you may need to tighten your belts, and sometimes make sacrifices for the good of the whole family. Does it have to be all doom and gloom? Of course not. You don’t want to burden them with financial worries. But making children aware of issues in an age appropriate way may make them appreciate what they get given even more.
It’s all about empowerment
The children of today will be the spenders, investors and builders of tomorrow. Generations before them have done a cracking job of making sure the economy is a mess, so the least we can do is pass on some survival tips. Research by Money Advice Services suggests that many of our habits and attitudes towards money are formed as early as age seven. We owe it to children to make sure they have the tools they need to cope, and hopefully make better financial decisions than some of us did.
How will you teach the children in your life about money?
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