Throughout the nation there is a huge number of people who are going through their lives with debts which they cannot afford to repay, or that have a huge impact on their lives. The reason why so many people get into debt is because they do not truly understand the value of money and what this means for their lives.
With this in mind then, as a parent I have always felt that it was incredibly important to ensure that my kids knew the value of money from a young age. If you want to teach your kids how to value money, here are some ways in which you can do it.
From the age of 10 I gave all of my kids a small allowance each week with which they could use to buy small treats. I wanted to encourage my children to get saving and so I made a deal with them that whatever they could save of their allowance, over a 3 month period, I would add a further 30%. I wasn’t sure if this game would work but the kids got right on board. I know that this kind of reward doesn’t always happen in the real world, but it helped my kids to see just how much money they could put together if they saved what they had.
Now, your 10 year old may not need to understand current accounts and interest rates, but that does not mean that they can’t learn a thing or two by going to the bank with you. Teaching your kids about banking and how it all works, is a great way to give them some extra knowledge about finance. The next time you go to the bank, take your child with you and explain what is going on to them.
The allowance that my kids receive doesn’t come free and they must work hard around the house to get their money. The way that we do this is to list the jobs and attribute values to each chore, depending on the difficulty. This helps to create a real buzz amongst the kids in terms of getting jobs done and most importantly, earning money. I know that through giving my kids the chance to earn their own money, that they are learning more and more about how the world works.
We have a fine system in place at home for various levels of bad behavior. Not only has this system improved the overall behavior of my children, it has also taught them the dangers of not doing what they are supposed to, and how it can impact their finances. I like to do this not to be cruel to the kids, but to show them that life has consequences and this can hit you in the pocket when you least need it.
The key to teaching your kids the value of money is to get them involved, let them see how money is made, and spent, and if it all sinks in, you’ll have a child with a good grasp on finances.