Want to raise children who are financially savvy and have enough savings to tide over unexpected life events like unemployment and unexpected healthcare expenses? Financial resilience starts at a young age. Most experts would recommend to educate them on simple financial concepts whilst they are young.
Children are highly perceptive and pick up money habits at home while they observe how their parents make decisions on everyday expenses. Here are some ways to inculcate good financial habits to children at home:
Start the concept of savings by asking your children to save for a toy or an item which they want. Make it a short-term goal and something which they can work towards to. Give your children different jars to compartmentalise their “savings”, “spending” and “investing”. This way, they are ingrained since early childhood that not all money given to them should be spent.
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Train your children to be responsible individuals who will clean up after themselves. Set up a schedule of tasks/ chores which they have to complete and reward them with pocket money to instil in them that they have to work for their allowances. That way, they would not take for granted that money would always be readily available to them without any effort.
Start a conversation
Speak to your children about their dreams and what it takes to attain their ideal job, dream house or living a lifestyle they desire. It could be a mixture of savings, investments or both. Let them understand the concept that quality education costs money and devise a plan on how they would be able to work part-time or apply for scholarships to obtain a quality education.
At the dinner table, discuss with them the concept of investments and how money can multiply with investments. Also, expose to them high-interest rates which credit cards have and the downside of debt.
Understand that each and every child has their special talents. Thus, parents should help them uncover it and hone their skills and expose them to the right courses to realise their potential. Let them know specialised courses maybe costly and explore ways to obtain a subsidised education.
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Teach them how to shop wisely
When shopping for groceries, give your child a manageable budget of $2 or $5 and let them know what is required. This way, they are exposed to the concept of budgeting and hopefully be savvier to distinguish between needs and wants. Engage them when shopping with discount coupons to let them understand that they can find ways to purchase the same items for cheaper.
Find creative ways to spend time with your kids that doesn’t require a lot of money. Spending on material goods and lavish vacations are distractions from the people we love. They send the message that it’s necessary to spend in order to have a good time. Sometimes, the best things in life are free. It’s good to be reminded of that.
There are many different teachable moments that you can leverage on to make financial literacy relevant for your child. It is crucial for your child to know how to help himself or herself for rainy days as we will not always be around when things go wrong. We can, however, prepare them in advance so that they can be successful in future. All you need to do is to have some patience and creativity to cultivate good financial habits together with your child!Recommend0 recommendationsPublished in