Recently I discussed the Nativity story with some children, the eldest of whom was six. They explained the story of Mary and Joseph and the arrival of their son. There wasn’t a detail omitted, including how they had to stay in the manger because Joseph had forgotten his credit card and so couldn’t pay for a hotel – not a detail I remembered from the original version, so clearly the story had been modernised.
For me, it highlighted the real need to teach our children about money, where it comes from and its value, rather than letting them go through life thinking a credit card is a magic card that allows you to buy whatever you like.
Teaching your son about money doesn’t have to be difficult, here are nine simple ways to do it:
1. Tying chores to monetary reward
Chores are part of life and managing a house to ensure the family lives in a nice, clean, warm place. Children should not be rewarded for doing their agreed family tasks. However, if they go above and beyond, or show initiative, like washing the car even though it is not their job, it could be rewarded.
2. Teach them to work within a budget
For example, your child would like to buy the latest video game and new runners. Together look at the cost of each, how much he should spend and if there is or isn’t enough for both. This will show them the consequences of overspending.
3. Good things come to those who wait
Teaching children delayed gratification will help combat the ‘buy now, pay later’ mentality that could mire them in credit card debt later. So, as much as you can, reinforce the idea that waiting pays off. For instance, make a homemade pizza together with all the ingredients your child loves; then microwave a store bought frozen one. The homemade pizza takes longer, but it tastes way better.
4. Don’t spend it as soon as you get it
Curbing impulse buying goes hand in hand with teaching delayed gratification. Lead by example. Before you go shopping, create a budget. Outline what you're going to buy, what stores you're going to, and the price range for each item. Your son will learn that planning purchases before you buy is the routine.
5. Saving is cool
Your son wants a new Star Trek figure that he doesn't have enough money for? Tell him to save up. Once he has enough, take him shopping and let him pay the cashier himself. He will be able to see how good it feels to work toward a goal and be rewarded in the end.
6. Keep track
Simply knowing where his money is going is a big step forward in your child's money management skills. Have him use a notebook to keep track of his money. Depending on his age your son may like to make a file where he can store receipts and statements.
7. Make the most of savings
Introduce your son to different forms of savings that could earn him interest, such as building societies and term deposits.
8. Educate your son on sales tricks
While you don't want your children to think companies are out to get them, every now and then point out manufacturers' sales tricks.
Have your kids donate a portion of their allowance to a worthwhile cause they choose. It teaches them that money can be used to help people, rather than just for buying things.
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