It's never too early to teach your kids about money.
Encourage kids to take interest in everyday living, the cost of groceries, how your earn money and how long it will take save for certain items. This way you’ll give them a firm financial foundation from the outset, one of the best gifts a parent can give their kids.
Giving kids a good grounding in sensible money management sets them up for life.
For older children, you could use online share games, like the one offered by the ASX to encourage children to explore the processes of investment markets and how to buy and sell shares while monitoring their portfolios.
Parents looking to encourage financial literacy can also consider giving pocket money digitally by opening up a bank account for their children and setting up a direct debit that can be cancelled if the kids slack off on their chores, or boosted if the kids take on more responsibility.
Opening up about the family’s finances – to an appropriate level – is also an important step in helping children understand money.
Parents should talk about the different pay rates of jobs, the costs of buying a house or renting and the ways in which home loans work. In a way children can understand.
For example, if your child gets $5 per week pocket money for doing their chores and wants a $20 toy. they need to understand it is four weeks worth of chores to get that toy. Get them to weigh up the value of their time against the possession.
Teaching your children young to understand money, will hopefully set them up to manage their funds better as their life stages change.
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