It’s a question I get asked often – how do I teach my children about money?
This is a topic I am passionate about because I have three little people whom all have very different outlooks and habits when dealing with money. Raising kids who are grounded, generous and smart about money is no small feat but it is incredibly rewarding both financially and emotionally for you and your child. I highlight some great tools to put in place at different learning stages.
There is NO guarantee that by teaching children about money in this way that we will get a generation of savers. However, if we teach kids early on about other options other than spending is a big start! Regardless, as parents, we all want to know that we have at least tried to build a foundation for one of the important elements of life – money.
- The physical connectedness of money
- Understand your child’s developmental level to teach age appropriate lessons
- Understand your child’s specific learning style
- Learning needs to incentivise good long-term behaviours
- The “three jar system” – two small jars for ‘Give’ and ‘Spend’, and a larger jar for ‘Save’
- What to implement at different ages
- Physically dividing their money between ‘Give’, ‘Spend’ and ‘Save’ jars
- Documenting their saving and spending totals
- Start ‘Shopping Maths’ and move the ‘Save’ jar to a bank account
- Tracking interest payments on their bank accounts – learning the phenomena of earning compound interest
- Giving your child the freedom to manage their own money
- Tax-free savings accounts for children
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