Financial literacy is one of the most important gifts we can give to our youth to navigate through this already complicated maze called life.
A few tips to get kids to be finance savvy at an early age:
1. Pay them for chores
Paying kids based on the chores they do in and around the house is a good way to get them to understand the relationship between work and reward, i.e. that money is something to be earned. This will shed light on the value of money and will make them less likely to waste it because they worked for it.
2. Put together a saving schedule
Teach children to put away most (if not all) of their chore money every week. Then contribute 50% (or more) of whatever they end up saving for the month as an incentive for them to save more – the more they save, the more you have to contribute.
3. Set achievable goals
Teaching kids to save towards something is a great way to introduce them to budgeting. Sit down with them and come up with a list of items for them to save up for. It’s also important to help them rank this list to teach them how to prioritise.
4. Curb impulse purchases
Try and discourage kids from buying things on impulse by encouraging them to carry on saving up for the items on their list as well as a reminder of how much less you’ll contribute by the end of the month.
Encourage your children to share a portion of their money to charity. This will teach them that money can be used to help others – no matter how big or small the amount.
It is never too early to teach our children the importance of good personal finance practices around earning, budgeting, saving and investing money.