Children always learn best when see great money management from others around them. This is something that I am passionate about with my children. As you will see, it’s quite easy to teach your children good money management skills through everyday activities.
Open a savings account for them
As soon as you are able to afford to do so, open a savings account for them. Most governments now provide specialist child-friendly accounts, which make it super easy for parents to save for their child’s short and long-term futures. In the UK, a junior ISA account is what you want. I’ve opened one for my kids, which also enables friends and family to contribute if they want to.
As soon as your child is old enough to understand the concept of money, tell them about their savings account. Let them see the cash that they will have access to as adults grow before their eyes. It is a great way to show them how saving can enable them to enjoy things that they never thought they could.
Talk to toddlers about money
The sooner you start talking to your kids about money the better. Even children as young as three years old are able to understand much more than you realise. As soon as they can count you can teach them basic money management.
Let your child save up for small items
From an early age, start giving your children a small amount of pocket money each week. When they want to buy something like a small toy, occasionally, tell them they can have it, but, that they need to save up for it themselves. Make sure that the item is a relatively inexpensive one. Ideally, you want it to be something that they would be able to easily save for within a week or maybe two. That way they will not lose focus and become disheartened when weeks later they still have not got their toy.
Use a clear jar or piggy bank
Instead of giving your child a traditional stoneware piggy bank, use one that is clear. We are visual creatures, so being able to physically see that we are progressing towards our goal encourages us.
Use savings target charts
You can also use a saving chart to help them to stay motivated while saving up to buy larger items. For example, if they want to buy a game, create a savings chart that tracks their progress towards that financial goal. A simple bottle image, which you colour in as each dollar, or other denomination, is saved is a great way of doing this. You can download one here.
Teach your children to help others
It is also a good idea to teach your children that they can use their money to help others. Give your child a piggy bank, which is there for the cash they want to give away. Being generous helps them to think about the true value of money and what a difference having enough of it makes to the kind of life they can lead. That realisation can fuel their desire to save and stay out of debt.