Teaching young children about money
As with many things in life, it pays to start early when it comes to learning about money.
Financial literacy in children has been linked to a variety of positive outcomes, from savings skills to budgeting confidence, and there are lots of financial lessons you can share with your children at home or while out and about.
Here are a few places to start.
Let your kids hand over physical cash when you shop
Next time you’re at the shops, help your child interact with the cashier or self-checkout.
A tangible object can help make it easier for kids to grasp the concept of money and show them how the exchange of money for goods works, as well as help to build currency recognition.
Create fun educational games about money
Build your children’s financial literacy by creating games in which children can learn about saving and spending money responsibly. Consider teaching them about how to make choices with a limited amount of money and the value of needs versus wants when it comes to spending.
Introduce pocket money
The concept of pocket money rewards kids for helping with things like household chores, while also empowering them to make decisions about how they spend their money and the results of their decisions. It also introduces the value of work and the concept of working for a return or a reward.
Talk to your children about how to avoid and minimise impulse purchases and encourage them to set money aside to achieve a savings goal.
Set up a bank account for them
The digital world has changed how money operates in society, so while providing your kids with physical cash can help with understanding the concept of money, opening a children’s bank account and introducing digital pocket money gives you the opportunity to teach them about money and technology simultaneously.
A children’s bank account serves a number of purposes, including showing kids that money should be kept somewhere safe and secure and that it can grow over time – even if you can’t physically see it. Remind your children that digital money is still money and consider going online and showing them how the account balance changes when purchases are made.
In addition to teaching your kids about money, a bank account is an investment in their future and potentially something they’ll keep for many years to come.