5 tips to teach your children about money (over the Holidays)
Good for you! You’ve been working hard to keep the family budget under control (never an easy task over the Holidays), but what do your children know about money? Here are five ways to help your children gain a good understanding about money early in life:
1. When should parents introduce kids to money? As soon as they learn to count! Seriously, observation and repetition are two important ways children learn.
2. Teach your kids the difference between Needs, Wants and Wishes. Give me a break! That’s hard enough for us adults. However, it’s vital to teach your kids how to save money, grow it – and most importantly, spend it wisely. And the best way they are going to learn… is by watching us!
3. Introduce children to the value of saving vs. spending. Consider paying your kids interest on money they save. Trust me, you’ll be amazed how quickly your kids start calculating interest! Think about matching every dollar they save as an incentive.
4. Pay your kids in denominations that encourage saving. For example, if their allowance is $5 per week, pay them in dollar bills and ask them to save one dollar a week. As I mentioned, they will soon learn that $5 a week at 2 percent interest (compounded yearly) will total about $263 after a year, $1,400 after 5 years, and $3,028 after 10 years! Not a bad reminder for us all!
5. Model smart shopping! Have your children help you cut coupons, and show them how you shop for sale prices. Explain how planning purchases in advance can save nearly $2,000 a year! Remember, unplanned spending typically results in 20 to 30 percent of our money being wasted.
When you think about it, teaching our kids to be fiscally responsible is a great reminder for us parents as well.
As always, we’re here to help you get out of debt, pay off your mortgage years earlier and save for the future. To learn more about my new Debt Breaker program, or our other financial services, call us at 0800-332-827 or visit our website http://DebtBreaker.co.nz.
Here’s to a strong financial future for your family,
Barry Kloogh
CEO and Authorised Financial Adviser
Leave a Reply