| It is a widely held belief that the earlier children learn a | | | | as parents you talk in hushed tones over bills and bank |
| foreign language, the quicker they will be able to pick it | | | | statements, your child may deduce that finances are |
| up and achieve fluency. The same is also true when it | | | | something to be secretive and furtive about. Similarly, if |
| comes to teaching children about money and | | | | they pick up some stress and anxiety over money, this |
| developing financial fluency. Teaching children from an | | | | too is a value that can be carried forward into adult life. |
| early age how to save and budget in a fun and | | | | 7 tips to help teach children about money |
| educational way can lay the foundations for sound | | | | 1) Fun, fun, Fun - make a game of both saving and |
| money management later in life. | | | | spending. If only spending money is fun then they will |
| A University of Minnesota study indicates that with as | | | | not associate any pleasure with saving. |
| little as 10 hours of financial education, teachers and | | | | 2) Routines - When they receive money as presents |
| parents can positively affect children's future saving | | | | or from the tooth fairy establish a routine, like putting |
| and spending habits. | | | | some or all of it in their piggy bank or savings account. |
| A good place to start teaching children about money is | | | | They will most likely take these traditions forward into |
| by demonstrating that money is used in exchange for | | | | their own families. |
| goods and services, showing them that in making their | | | | 3) Consistency - If you pay pocket money in return for |
| own purchases they are in fact trading with the shop | | | | helping around the house make sure they actually do |
| owner and receiving the product in exchange. As an | | | | the work. Even very young children can be responsible |
| example, next time you are shopping, try to have the | | | | for tidying away their own toys or clothes. It's a good |
| exact change for the product and give it to your child. | | | | idea to pay a set amount on a regular day but |
| Let your child hand over the money to the cashier and | | | | encourage their entrepreneurial side by giving them the |
| after you have left the shop, have a chat about how | | | | opportunity to earn more if they seek it. |
| the money paid for the item. | | | | 4) Look after the pennies - Turning off the lights, |
| It is important to always approach teaching children | | | | saving their pennies and giving small donations to |
| about money with openness and honesty, giving a | | | | charity collections are small things that they can do to |
| constant and clear message. Explain to them why | | | | create positive habits which may last a lifetime. Ensure |
| they can or cannot have certain items they wish to | | | | that you explain why you are doing it and what the |
| buy. You can't always say yes to a request for | | | | benefits are. Charitable giving can illustrate to your child |
| money and if it has to be a no, it does few favours | | | | that there are others less fortunate and introduce the |
| being over indulgent, but equally the 'because I said so' | | | | idea to be grateful that they have more than enough. |
| clause has little educational merit. | | | | 5) Consequences - When your children ask for |
| Before long your child will have a basic understanding | | | | something, rather than say no. Ask them if they would |
| of money. When this happens you may wish to start | | | | like to buy it from their own money and explain what |
| explaining the bigger picture. You might consider | | | | the consequences are. You may find that they are |
| showing children how the whole family benefits from | | | | more reluctant to spend their own money than they |
| money via a visit to the supermarket. Once there pick | | | | are yours! |
| out two similar products, perhaps a well known brand | | | | 6) Praise, praise, praise - We may learn by our |
| and an own label and allow the child to make the | | | | mistakes but by praising we reinforce positive |
| choice. If they choose the supermarket's own brand, | | | | behaviour and will encourage children to do the right |
| allow them to make a further purchase with the saved | | | | thing out of choice 'because it feels good'. This can be |
| money. This might be a useful starting point for a | | | | applied to saving, spending wisely and giving to charity. |
| discussion about value vs. price. | | | | 7) Spend and save - when your children are receiving |
| Consider also the type of signals about money that | | | | pocket money, teach them to save either some or all |
| your child picks up upon. You may feel it's important to | | | | of it. It is always a good idea to let them spend a little |
| let your child know family money matters are private, | | | | however, as this encourages a work-like mind which |
| and not for discussion outside the home. If however, | | | | will set them in good stead later in life. |