When should you talk to your kids about money?
It’s a question we get asked very frequently. And in short, we always say as soon as you can!
Teaching younger kids the value of money through real life situations and examples will help them understand where money comes from and how it is earned. Here are a few examples of how you could approach this with your kids.
At the ATM
The ATM is a great place to start teaching kids about money. You could explain to your child that the ATM holds the money you have made by working hard and saving. It is not just a hole in the wall where money comes out.
When you take money out of the ATM it is taken from your bank account and you’ll have less in your account to spend later.
At the supermarket
When buying items at the supermarket, you can explain to your kids how items are priced and that you can get cheaper or more expensive versions of the same product. This is also an opportunity to discuss how you can shop around for the best price.
You could get them to compare prices for you and pick the cheapest one. If they want a particular brand then explain the price difference to them.
Paying bills
If you receive bills in the mail or online, this can be an opportunity to explain that electricity or your internet connection costs money. You could explain that to pay a $150 power bill it took you so many days at work to earn the money. This will help create a connection between time spent at work and money, as well as the fact that electricity and the internet cost your family money. It might also make them think twice about leaving lights and appliances on.
Doing a budget
Involving your kids in discussions about your family budget is another way you can talk to your children about money. This helps give them the big picture about costs and spending.
By explaining how much money your family has to spend every week and how this money is spent your kids will better understand the costs of family life and how much can be saved for other things.
Giving pocket money
Pocket money can help children better understand the value of money. See the govenrments giving kids pocket money webpage for more details.
Teaching the basics of shares
Even at a young age, kids can begin to learn about how shares work, why they are beneficial and how it can help set them up for the future. It’s also a good time to speak about risk and reward with all financial investments! And the best and safest way to start a portfolio is with iInvest for Kids!
They don’t typically teach kids at school the importance of finances, so it’s a job that us as parents need to take control of. And what better time to start than today!
To learn more about how you can help your young ones – or about our iInvest for Kids – ask us today!
