Teaching money: A guide to teaching finance from an early age
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We all need to deal with money sooner or later. Teaching your child the key principles of financial responsibility at an early age could provide them with valuable tools for building a secure, successful future, and it needn’t be a drag.
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Introducing your child to the world of finance:
Money play: Playing shop can have the dual benefit of reinforcing maths lessons learnt at school and help your child understand simple financial transactions. Make money fun, use your penny collection as tender and help your child to price items up and play at selling them to you. Reverse roles and let you child experience shopping on a budget!
Pocket money allowance: Encourage your child to budget and save, if they’d like to save for a larger toy help them deposit their pocket money into an account to save up, and it could prove a valuable lesson in money management and saving.
Giving is important too: If you give money to charity you might want to get your child involved in the process of giving. You could let you child select a charity for your giving budget. Some charities offer evidence of tangible results of giving- show your child the result, make it real.
Resource rationing: A camping holiday could be the perfect time to talk and teach about resource management. Allow you child to take over resource rationing on a weekend in the wild. If all the cake is eaten for dinner there won’t be any for the rest of the weekend.
Share your finances: For many households finance still occupies a taboo status, sharing finance doesn’t mean you have to lay everything bare, but you could explain your food budget when on your weekly shop, let your child take a calculator to help you match your shopping list with your budget.
The college savings account: If you put money away for your child’s future encourage them to get involved with making deposits and watching the fund grow. If you’re thinking of opening an account talk about what different accounts offer.
Investing: Encourage any interest in investment, get you child involved with investing a small amount in stocks. To make this more tangible you could help your child purchase a few stocks in a toy manufacturer or other recognisable brand, help you child keep track of the value of their stock/s over time and explain the way stocks work in simple terms. E.g. by owning a share you own a part of the company. Keep it small.
An early start in understanding the world of finance can instill good habits from a young age and teach your child the importance of dealing with money in a responsible way. Finance doesn’t have to be boring and a sound financial education could help your child on the road to a more successful future.
