Parents, you have the power to shape your child\’s relationship with money.
So, it’s never too early to start talking to our children about where money comes from, how to budget, how to spend wisely and how to set savings goals.
Here we’ve put together a series of tips for teaching your children to be money smart, we hope this helps. And if you’d like financial advice for you and your family don’t hesitate to contact the team at Acumon Accountants – we have offices located in East Maitland, Morisset and Wallsend.
Tip One: Talk to your kids about money
You don’t have to know everything yourself, just start a conversation about money when the opportunity arises. Children will, by nature ask for the things they want. It can be difficult to have to say no. But talking to children about how we all have a limited amount of money, and we have to prioritise what we spend it on.
Tip Two: Explain how money is earnt
Talk to your children about how you earn the money you have to spend. Explain that you get a certain amount of money when you get paid and that money must cover all the essentials, like your home, food, and clothes. Talk about how you prioritise what to spend money on.
Tip Three: Need vs Want
Chat with your children about the difference between \’needs\’ and \’wants\’. Encourage your children to think about needs and wants, when spending money. Ask children, do we need this or do we want this?
Tip Four: Where does all the money go?
Everyday situations present a great opportunity to teach children about how and where money is spent.
When shopping with children, show them how much things cost and explain:
- The difference in prices for the same or similar items
- How to compare the cost of items, per unit cost
- How to work out which items are better value
- How to work out price differences, sale prices, discounts and deals
Tip Five: Engage children in bill paying
Involve your children when you are paying a phone, electricity, or water bill. Explain how many hours or days you had to work to pay that bill to build a connection between earning money and spending money. This will also reinforce the concept of essential spending compared with discretionary spending.
Tip Six: Do a budget
Involve your children in preparing a family budget. Discuss how much money you have each week and what needs to be paid for. This will help children start to get a sense of the cost of living and how long it takes to save. If children get pocket money or earn money of their own, it’s a great idea to help them create their own budget.