It’s never too early to save. Our children get a lot from us as parents and, by the age of two, love to imitate what we do. Why not get them into learning how to save early by example? We’ve put some tips together on how you can help them become financially savvy, independent and successful in making and growing their money.
1. Start early
It’s never too soon to teach a youngster money skills so before they even hit their teens, you should already be talking to them about what things cost, how they can save their pocket money and what the value of money means.
2. Take them to the bank
Whether you want to open a juvenile or child savings account – or simply want to show them how a bank works, it’s a great way to teach them how a bank account is key to successful money management.
3. Give them an allowance
Deciding a monthly allowance and then leaving your teenager to manage that income is vital if they are going to understand how to manage their own finances one day. Just make sure you don’t top up their allowance if they run out. By sticking to an amount agreed by you and your child, they will quickly learn to control their spending urges.
4. Don’t be negative about money
Never talk about money or wealthy people in a negative light as it can cause your offspring to have unhealthy perceptions about wealth. You want your teenager to respect rather than fear money.
5. Make them earn
Encourage them to have a part-time job or take on chores around the house that earn them extra cash. The sooner they realise how hard graft can translate into real money, the quicker they will appreciate the value of money.
6. Show them the household bills
By going through the utility bills together with your teenager, they will understand that there is an actual cost associated with filling the bath too full or leaving lights on in empty rooms. This, in turn, will make them more cost-conscious about using energy in the home.
7. Encourage them to save
Tell your child to save for big purchases. If they learn to set aside a percentage of their monthly allowance from the outset, they will acquire savings skills that will last a lifetime.
8. Stay on top of your own finances
It’s all very well dictating to your children about efficient money management but if you are not keeping an adequate track of your own financial affairs, then you are not setting a good example to your teenager.
9. Allow them to fail
It may sound odd but you actually want your child to run into money issues in their teenage years because it gives you time to explain where they have gone wrong and how they can put it right. A minor mishap now lessens the risks of bigger mistakes further down the line.
10. Buy a prepaid card
If you’re worried about your teen storing wads of cash in their wallet or piggy bank, buy them a prepaid card. It looks like a credit card but rather than paying for items on credit, you could add your child’s monthly allowance to the card so that it effectively acts like a debit card. In this plastic-obsessed world, it could be a more efficient way of teaching money-skills than cash itself.