Do your children nag you constantly…… “Mummy, buy me this!” “Daddy, buy me this!”
Many children imagine that money grows on trees or magically comes out of a wall. Parents need to plan ways to teach children about money at an early age. It’s one of the most important skills in life. Start inculcating values in them early at an early age. The average child starts to learn about the value of money from as small as four or five or even younger.
Some parents provide their children with pocket money to teach them its value, to be responsible and develop important skills such as learning to budget and save.
Teaching Children to Save
Teach your child to save part of their pocket money each week. For young children a piggy bank is a fun idea or for older ones, a bank account. Learning to save for purchases teaches the basics of life - the need to save for things.
Parent’s examples and decisions are also an excellent teaching aid. If you’re always spending, children will automatically to do the same.
Young children do not realise the financial commitments you have and these need to be explained. Shop with your children - let them know why you decided not to buy a certain item that tempted you. Explain that after considering having to pay for the groceries, rent or mortgage and petrol, there was not enough spare money left. You have taught them the valuable lesson of budgeting and delaying self gratification.
Talk with your children about advertisements on the TV and in the junk mail. Teach them the purpose of advertisements - to get you to spend money. Reason with them that they can’t always have everything they see.
How much Pocket Money?
Some psychologists suggest $1 per year of age but this is excessive for large families or low income earners unless you expect your child to pay for certain things.
Teenagers are often paid an allowance by parents but are expected to pay for their bus fares, clothes, toiletries, mobile phones and entertainment for example, teaching them financial skills. Their spending needs to be monitored by the parents and when they overspend let them know you’re not always going to bail them out - therefore teaching them very valuable lessons.
When your child is old enough, open a bank account and encourage goals to save up for something. Kids in their late teens may want to save for a car.
In a Nutshell
Many young people have no concept of money or very low financial skills with debt becoming more prevalent amongst them.
Ultimately it’s the parent’s responsibility to teach children the most important skills in life - the value of money.
About the Author
Jennifer Steenland is the Director & Manager of Savings Mart, a money savings tips website for Australia, providing Bargains, Discounts, Cheap Holidays in Australia, Eating Out in Australia, Affordable Accommodation and much more. Find out more at www.savings.mart.com.au