Teaching your kids about money

Teaching your kids about money form a young age doesn’t necessarily mean they will grow up to be financially responsible adults, but it can help them on the right path.

[UKPRwire, Sun Mar 29 2009] Teaching your kids about money form a young age doesn’t necessarily mean they will grow up to be financially responsible adults, but it can help them on the right path.

If you as a parent are able to manage your own finances well, keep debts in check, pay bills on time, and save effectively for long term goals, then this positive reinforcement will mean that your kids have a good idea of what responsible money management means. One day they will have to budget a mortgage, car payments, motor insurance and the costs of children of their own into their monthly earnings, and having a sound start can make all the difference.

As your kids grow and become more independent in their decision-making and personal responsibility, they will become more financially aware and more able to understand the importance of saving. It’s a good idea to give them a goal to save towards – a younger child can ‘save’ for a toy and an older child can save towards a first car payment or a year’s worth of car insurance.

Children learn from what they see or do, more than what they hear, so it’s a good idea to start them young. As soon as your child has a good idea of what money is for, how its earned and where it comes from, it’s a good idea to start giving them pocket money or spending money. An allowance is usually the best place to start educating children – it gives them a sense of responsibility and ownership over their own money, and gives then real life situations to work with.

One day when your child is an adult and has left your home to start his or her own life and family, your kids will need to know how to handle their finances in order to lead successful lives. A good grounding as children will mean that they will not struggle to make the right choices and will be able to make informed decisions about their spending and earnings.

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