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Teaching our children good attitudestoward money from an early age is imperative if you want them to avoid the debttraps so many people fall victim to. This education can start a lot youngerthan you may think. It comes down to good organization with money, a goodattitude to money and good role models ?that's you! Here are the twenty top tipsfor you to try:
1. Play ?Shops?: When your children arevery young it is great to play shops with them to teach them about the conceptof money. You can start with pretend money and then gradually move on to realcoins and notes with your children. This allows children to experience payingfor something and receiving change. It does not need to be precise but usingfigures close to realistic prices is extremely beneficial.
2. Good old Monopoly: My husband swears by this one, saying that is how he learned thebasics of real estate - buying property; collecting rent etc. We often play itwith our kids who picked up on the concepts more quickly than I even expected.
3. Practice, Practice and morePractice: Give your to spend occasionally at the news agency, for example. To beginwith, give them the right amount of money, then graduate to giving more thanrequired so they receive change, prompting a chat about how purchases work.
4. Money Jar: Save all your small coins in a communal jar to buy a joint familypurchase so that everyone feels a part of the saving process and theanticipation that comes with waiting for something you really want.
5. Joint Decisions: When shopping, get your child to help to pick out the itemsneeded at the best prices. Talk about your budget and what you need to do tostay on target, jointly making a decision between this treat or that one, forexample. They will be way less likely to throw a tantrum if they understand thereason behind what you do and don't buy.
6. Plan Ahead: When saving for something tell your children what it is and howmuch money you need to save and how long it could take; this is a great way forchildren to see that we need to wait and save to get what we want. Instantgratification doesn't rule the world! Be sure to tell them occasionally thatalthough you would like a certain item, you are unable to get it due to thecost, so that when you say no to them (as you should a reasonable amount of thetime) then they know you don't get everything you want either.
7. Sacrifice: Explain that you sometimes need to cut back on things to be ableto save enough to buy something you want or need. This doesn't happen overnight and will helpteach them patience.
8. Chores/Pocket money/Allowance: As soon as they are old enough ( many say 4 is a good startingpoint), encourage them to earn pocket money by doing chores at home. Negotiate theprice for different tasks, making sure they understand why a certain chore isless than another, more time-consuming one. Encourage your kids to do odd jobs for others to gradually earn theirown money and learn to be accountable for it.
9. Savings: Introduce the idea of saving early on. Show them a bank statementand explain the fees, the interest & all the ins and outs. Show them the value of regular savings &how they can add up over time. Open up abank account for them when they are a baby and put small amounts in here andthere until they have their own to put in from birthday presents etc.
10. Donations: Be sure to pass on the concept of ?giving? as this shows thatdonating to charities and the like is a normal and worthy thing to do. Get themto choose a favorite charity to give some money to, to feel ownership of theactivity and feel proud that they are contributing and helping make adifference.
11. Out of ?love? chores: Explain to the kids that as they get older they will be expectedto do some of these jobs simply as part of being in a properly functioningfamily. It's all about team work to make life run smoothly for everyone.
12. Spending choices: Let your children spend their savings on what they choose to.It's one of the few areas they will feel they have control over, and to take itaway from them could cause avoidable conflict.
13. Cash Flow Concept: When you are cash poor, be sure to keep the kids informed aboutthe family budget situation. If you need to reduce their pocket moneytemporarily, then do so after discussing the steps needed to take to pay thebills and put food on the table, ensuring they appreciate that you too aretightening the belt on expenses as well.
14. Language of Money: Use the following terms as part of your day-to-day life and explain in more detail as time goesby: dollars and cents, spending, earning, saving, budget, cost, value, coins,bank, cheque, credit card, debit card, debt, owe, interest, loan, mortgage,change etc.
15. Set up System: Have 3 money containers - one for Expenses, one for Saving andone for Donations. All three are important to learn about as part of theirongoing education about managing their finances and having a social consciousas well. The amounts can vary and are interchangeable depending on their ageand interests ? some hobbies are extremely expensive!
16. Write a list for Expenses to see what it totals and what can or can't be forgone. Kids lovea bargain as much as we do, so encourage ?bargain hunting? to get the bestdeal. Take note of the savings and perhaps get them to consider (not force!)putting that in the savings container rather than keeping it in the spendingone!
17. Buy a Special Note Pad: As your children get a little older get them to keep track oftheir by using a notepad (as you should too) to record all your incomings andoutgoings along with a running total ? great habit to get into as an adult.
18. Bank Account: Choose a children's account with the best interest rate andpreferably no charges. Make sure you let them open the mail when their BankStatement comes and for them to file it in a special spot in the filing cabinetfor example.
19. Teach your kids how to beAssertive Shoppers: when it comes to the price you pay forthings (i.e. is that the best price you can do?) and also if there are anyproblems with any purchases you make. Faulty goods are not acceptable andalthough some shop owners try to put the onus back on to you, it is theirresponsibility to sort it out. Educate them to be aware of how to approach theretailer if there is a problem with a purchase. Support them so that they canclaim a refund successfully without entering into an argument or feelingnegative about the experience.
Keeping Important Receipts: is essential for proof of purchase so get yourkids into the habit of keeping these all in the one spot in their own folder ormaybe in a file along with their bank statements.
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