EASY WAYS TO RAISE THE MONEY-SMART CHILD

First, why are we talking about children becoming money-smart and not about book-smart?

Well, both are important but today, let’s focus on money!

Money is so important in our day-to-day lives. We can’t do without it.

It is that important yet we don’t talk about it enough, not even to our children. We’re more concerned about our children’s academics and helping them be the best in what they do which is very important. But again, for them to have a balanced life, they need to be money-smart. Achieving this starts with you telling them about money and helping them have real-life experiences with money.

Wondering why teaching your child about money early is so important?

1. To achieve early financial independence for your child.
2. You want your child to move out sooner. According to the RBC Poll 2019, half of parents financially support adult children in their 30s.
3. You want to avoid a delayed retirement plan for yourself. Imagine your 35-year-old is at home with you, it will be a bit of a struggle with your retirement needs and would delay a lot of your retirement financial plans. I believe you don’t want this for yourself right?
4. Financial literacy is a critical skill that will help your child build habits to help them grow their future success. Your child watching you, is how they’ll learn. So, you must teach them the skill early. According to pension research council report, 84% of graduates indicated that they needed more education on financial topics.

 

PRACTICAL STEPS TO TEACH YOUR CHILD ABOUT MONEY

  LET THEM EARN AN INCOME

As I mentioned earlier, practical involvement helps children learn about anything and it’s the same with the knowledge of money. Letting them earn is a practical way to achieve financial literacy for children.

Interestingly, they don’t need a job to earn. Use simple ways to let them earn by;

(a)Giving your child money for birthdays, Christmas etc. for teenagers, all they want is money instead of gifts.

(b)Pay them allowance/salary-. Allowances are teaching tools; they help you as a parent teach your child how to manage their own money. Get them to work for you -From 13 years of age, your child can do light jobs such as newsagents, work in shops, can work as a hairdresser.

(c) Teach them that all the money they receive is not theirs- create a mandatory rule:

Rule1: Saving

Rule2: Giving

Rule3: Spending

ACCOUNT OPENING

Another practical way to teach your child about money is by opening an account for them. Creating a savings account for your child teaches them to imbibe a saving habit especially for older children. Involving them in managing the money in their account teaches them budgeting and having them aware of their money growth makes them see investment possibilities. The mindset of owning an account itself gives them the excitement of financial independence. Isn’t that such a sweet way to learn? Of course, It is!

CREATE AN AUTOMATED SYSTEM: 

This could be  money from their allowance or their job.

 

INVESTMENT/SAVINGS FOR YOUR CHILD

When I say investment for your child, some parents often say I don’t have money to invest or the cost of living is so high. There is always a reason or the other not to invest. The truth is you don’t need a lot of money to invest in your child. Starting with a pound, the money they dash them, some children are qualified for child benefit, taking out £5, £10, £20 every time they’re paid is enough. The most important thing is, building a savings or investment habit for them. It starts with opening an account in your child’s name. Buying shares in their name e.g. amazon shares, apple shares, cryptocurrencies etc. Let them be aware too, show them how it works.

 

In conclusion,

Carefully ponder on this.

How do you see money?

Do you see it as a god? Do you demonize or glorify money?

If all your child hears you do is quarrel over money with your partner, your child will begin to see money as god. Know that, whatever you do with money is what your child will do with money. Also, what you do with money determines what money is to you and applies to your child. Start talking to your child about money using age-appropriate words.

The earlier you start the better. You can start with as little as taking them to the shop, give them money, let them pick their snacks and make payment by themselves.

The more they get real money experience, the more they’ll understand money.

Cheers to raising not just book-smart but money-smart children that thrives.