In schools youngsters aren’t always taught about the importance of managing money. Even many adults learn the importance of saving and spending through trial and error. But don’t worry… there are ways to empower the next generation through financial education.
Children’s minds are like sponges from an early age, they absorb all information you feed them. It’s whether they choose to listen to it that’s usually the problem! Young Money, is a trusted and valued provider of knowledge, resource and training, they equip children and young people with the skills, knowledge and confidence to manage their money. They even committed to sending half a million financial education textbooks into schools in the UK! We will be explaining why it’s good for kids to receive financial education from a young age.
Pocket money / allowance has always been a great method for parents to teach their kids the value of money. They learn that to earn money and treats they have to work hard for it. This will then set them up for future expectations. If your child really wants the latest, best toy, let them know they will have to save up for it. Motivating, educating and empowering children to become habitual savers and investors, will enable them to be more aware of money responsibility.
If you’re a parent then keep on reading. We’re going to walk you through a few tips and tricks to teach children of different ages about money. GAME ON.
Age 2 to 6:
When transitioning from toddlerhood to childhood, kids’ learning skills develop dramatically. You may find that children are always asking “why?”. And as annoying as it may become, it’s a great opportunity for you to teach them as much as possible. (Whilst they’re interested!) Psychologists say during these years kids have rich imagination. And at this age they love to play so it is essential to make use of activities for educating your kids on the importance of saving and spending.
Money lessons during these years will set them up for the future, so you could try building financial education into everyday activities/tasks. Like small, easy chores, putting their toys away when they’ve finished playing can result in some pocket money. This will teach them tidiness and that through hard work they will be rewarded. Then they can pay for their own chocolate bar which will be much more fulfilling!
A piggy bank can be a fantastic way to teach your kids to be patient and save money. Teach them to set goals. If they want a new toy, they have to save up for it. Praise your child every time they put money into their piggy bank. They will begin to realise it’s a good thing and want to put money in their piggy bank. Let them know how much they have saved and how far they have to go till they can get that new toy.
Age 7 to 11:
At this age they are more rational. They have more mathematical understanding. So it’s important to teach your kids that money is limited and once you have spent what you have you won’t get it back.
We’re going to continue with our pocket money point as at this age they are more capable and aware. For example they could get a few pennies for making their bed or taking their finished plate out to the kitchen. And with good behavior at the end of the week they could get some money to either go to the shop with and spend it on sweets or put it in their piggy bank for something even better! Warn them that once their piggy bank is empty, it’s empty. They won’t have any cash until their next pocket money is due. This will teach them the value of each cent.
At this stage your kids would have matured (hopefully!) and are able to understand that money is a finite source. By using the methods we have given in educating your kids about the importance of saving, they should now be aware that to get what you want you have to work hard, it won’t just be given to you. They will make decisions for themselves without being criticized. Suggest getting a summer job or a paper round between the ages of 12-15 so that they can earn themselves money to spend however they want. Then they will be in charge of their own finances.
Ages 16 – 18 they are old enough to get themselves a proper job (mainly part time) which gives you a good opportunity to remind them about the importance of saving a percentage of their monthly wage so they can look towards buying a car or something exciting.
Hopefully by providing them with financial education from a young age, it will enable them to become financially stable in the future. If YOU aren’t so sure about the best ways to save in your home, check out our blog: 8 Quick Changes in Your Home that Start Saving Money.
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