Five fun ways to teach kids about money

April 26, 2018

It’s never too early to start talking to your little ones about money. Learning money skills at a young age will help your child develop good habits for the future. Here are some tips to help start the conversation.

Teach them the difference between needs and wants

It’s important that your child learns the difference between what they need and what they want. This will make future conversations about money easier. Pocket money can be a good way to start. It doesn’t have to be much. Think about how much they will get and on what basis it’s given, for example, is it earned? It’s important to be consistent. Then discuss with your child how they plan to spend their money. Encourage them to develop a habit of saving by putting away some of their pocket money each week.

Open a bank account

One of the best ways to help children learn about managing money is to have a piggy bank or open a savings account. To help children understand why it’s important to save, sit down with them and agree a savings goal. It could be a short-term goal, like a new toy or jersey. Longer-term goals might be saving for a new bike or money for summer holidays. You could think about letting them spend some of their money from time to time on something they have their eye on – a treat as a reward will keep them motivated and make saving fun!

Teach them how to budget

Take your child grocery shopping every now and again and explain that you have a set budget. Show them how to check prices of items and let them try to add it up as you go along. You can explain that using coupons and special offers helps to keep within your budget. If you go over your budget ask them for suggestions on what to do next? When you get to the till let them pay for the items and then count up the change.

Teach them how to borrow money responsibly

While this can be a tricky area for young people, once they grasp it, they will have a better concept of borrowing money. You can offer to give your child a loan for something they really want like a bike or a computer game. Let them save up for half the cost on their own and you could agree to lend them the balance. Sit down with them and do some research on how much the item costs and check if it’s on sale.

Let them pay back what they borrowed from you over a certain amount of time. They can pay you back a set amount each week. This will help them to fully understand what it’s like to pay back a debt.

Make sure to keep it fun

Teaching children good money skills takes time. You’ll want to make sure they enjoy learning about money and try to keep it fun and relevant for them. When planning your next family day out, why not give your child the opportunity to choose where you go. Try to limit the choice to two or three different places. Give them the total amount you have available to spend and discuss the cost involved for each option. When on the trip, give your child a small amount of money to budget and spend on themselves.

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