Teaching kids about finance
Teaching kids about Finance
Empowering your kids to make their own financial decisions to become secure and self-reliant early in their life is rarely taught. In order to do this you might want to prioritise finance in their lives. Here are 7 tips to get you on your way in teaching kids finance.
Teach your kids independence and responsibility
Household tasks can play an important role in teaching kids about independence and responsibility. Even though completing chores isn’t linked to any kids’ allowance. Doing household tasks helps your kids understand what it takes to make money. Each child can be made responsible for making their bed, keeping their bedroom clean, setting the dinner table, and putting their laundry away at the end of the night.
These chores may not be appreciated by them but it will encourage a strong work ethic. While kids will often grumble about the work, they later show their thanks for getting the skills necessary to live on their own. Being responsible for their own finance after these life skills will seem easy.
Open a savings account
What better way for kids to understand money and finance than to have and manage their own? Age five is a good time to start them on an allowance. By showing your children how you open their account, how to make deposits, and how to track their savings, you can impart valuable knowledge on finance.
Parents can make a household rule that savings stay untouched until it affords them a valuable opportunity. This includes money from allowances and other income including gifts. In turn, your kids will one day be amazed at the doors that their savings will open for them and the power of finance.
Teach them why finance is important
Simply put, knowledge is power, and it will give your children the opportunity to make choices and follow dreams. So show your kids that learning about money and finance is an important part of them having a successful future.
Put education at the top of your parenting priorities by setting expectations and celebrating educational success. Children learn by example and observation. Set up a savings account as soon as possible and involve your children in the process. Involving them in finance will allow your children to build their financial confidence and understanding.
Make finance fun
As you are teaching your children finance, make the experience fun. Leverage fun activities, games, and books. Create weekly money dates or have weekly standing money conversations. The whole idea is to make talking about finance and dealing with money a comfortable experience for your children. Get them to buy you a coffee on the next school run so they understand the feeling and impact of spending savings. Talk about the feeling of spending and being a ‘responsible adult’.
The power of finance and investing
When it comes to wealth building, investing is how you grow your money. And teaching your children how investing works at a young age can set them up for incredible success. Starting early will help them reap the benefits of compounding, appreciation, dividends, and more on their investments. A true understanding of finance and the investment world.
Challenge gender stereotypes in finance
When it comes to financial literacy for kids, it’s important that we don’t allow them to fall into unsavory stereotypes. Traditionally, girls are encouraged to take on roles to care for others. The emphasis is on their nurturing capabilities rather than on their earning potential. However, who said girls don’t have incredible earning potentials? Help girls become more comfortable with pursuing their ambitions and to be unabashed about their desire to make money.
Teach them to be in control and effect change. This in turn will help them understand that they can care for others with their own wealth. They can use it to invest in their families, communities, and in causes they support.
Leverage others to help teach finance
This last strategy is for you. Raising children is hard work and should not be done alone. Create a reliable support system to help you achieve the goals you have for your teaching your children. This support system should include mentors and other successful people in your life that can impart wise financial and life teachings to your children. It will normalise the conversations around finance and your kids will learn that it’s an important part of everyone’s life.
If you would like to know more about how we could help you with this journey, please get in touch with us here.
– 21 April 2021 –
In preparing this article, Praescius Financial Consultants NSW Pty Ltd, Praescius Financial Consultants NT Pty Ltd, Praescius Financial Consultants HB Pty Ltd and Praescius Financial Brisbane Pty Ltd have not considered your personal circumstances, goals or objectives; as such the information, commentary and assertions made within this article may not be suitable to you. Please seek personal financial advice prior to acting on this information, or making a decision regarding the choice of a financial product or strategy. Further information and disclosures can be found in our Financial Services Guide or by contacting us on the phone numbers provided.
Praescius Financial Consultants NSW Pty Ltd, Praescius Financial Consultants NT Pty Ltd, Praescius Financial Consultants HB Pty Ltd and Praescius Financial Brisbane Pty Ltd are authorised representatives of Praescius Financial Holdings Pty Ltd ABN 14 610 960 980 AFSL 486455, 2a/57-59 Oxford Street, Bulimba Qld 4171.
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