Absurd as it might be, money management still isn't something that is taught in schools. Many of us learned the hard way how to manage our money, whether from having to take out loans to cover emergency payments or falling into a snowballing debt that proved near impossible to get out of.
If you want your kids to learn financial literacy from a young age, it falls on you to make this a reality. The good news is that you don't have to be an expert in all things money to give your kids the knowledge to make smart decisions with their cash. Just follow these five simple methods to teach young people about money management.
The concept of pocket money might sound old-fashioned, but it remains a great starting point for teaching your kids (especially younger children) about personal finance. By giving your kids a small weekly amount, you help them learn how to handle their own money and teach them an important lesson: that money runs out if they spend it too quickly.
Let your kids make their own spending choices, even if you know they won’t always get it right. The real lesson comes from the money management experience itself. If they need a bit of extra support, work through these tips for better money management.
Giving your kids pocket money can also serve as a great introduction to saving. If they want to buy something bigger, encourage them to set aside part of their pocket money to save for it over time.
If you are giving your kids cash, you can use a clear piggy bank or a jar, so they can see the money building up. Otherwise, consider getting them a child-friendly savings account that they can keep track of. When they see their savings progress, they will understand the reward of saving (and the patience it requires!) from an early age.
Are your kids showing no interest in saving their money? Convince them with these five reasons to start saving.
Responsible spending is one of the key components of financial education and is absolutely essential for managing money sensibly. Taking your kids shopping will help them understand how you make spending decisions based on a budget and why you choose one product over another.
Show them how to compare prices and point out when something is on special offer. These might only be small moments, but they help make money management real, because your kids are seeing how decisions affect what you bring home.
Paid chores are something of a controversial topic amongst parenting experts, but there is no denying their effectiveness in teaching children the transactional relationship between work and money.
Rather than forcing your kids to spend their evenings working for money, offer them small, age-appropriate ways to earn extra cash at home, like helping to wash the car or clean out their bedroom cupboards. This shows them that money has to be earned before it can be spent.
Even today, many of us struggle to talk about money, and it is still a "hush-hush" subject even behind closed doors. But a lack of conversation around money is one of the reasons why our kids grow up so clueless about how to have a healthy relationship with their finances.
So, don't be afraid to have open conversations with your kids about your own money. No, you don't have to tell all, especially if you have younger kids who might be tempted to blab your personal details to all their friends. But when bills arrive or you are budgeting for a family day out, share a simple version of the process with your kids. This makes financial responsibility a normal part of life rather than something that is hidden away. It also makes them less likely to feel money shame as they enter adulthood.
Making money part of daily conversations and giving your kids chances to practice sets them up for better financial security in the long run. The earlier you instil these valuable lessons, the more confidently they will manage their hard-earned money as adults.
Talking to kids and young people about money
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