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05 November 2018

The topic of money is always a sensitive one and never really openly discussed amongst adults. We seem to box it away with the other sensitive topics like politics, religion etc

In an ever-increasing capitalistic world, one thing we can all agree on is that we do need to be more financially savvy in order to manage our earnings better and make more sound decisions, from a financial standpoint.

So, if this is something we as adults struggle with, wouldn’t it stand to reason that perhaps we need to start early to instill this knowledge and good practices in our children, to stand them in good stead for when their time comes, in order to avoid them becoming financially challenged?

So how do we then broach such a tricky topic with our children?

One could argue/suggest that the schools should do more to address this issue, and perhaps incorporate it into the curriculum, but perhaps there are things we could do at home to facilitate this as well.

Charity they say, begins at home so it shouldn’t be any different in this case. We’ve put together some practices that can be easily implemented on the home front:

Piggy Bank

This is a great way to show your child how (and what it means) to save – especially when they get to that age where they have started dealing with numbers.  It also gives them a great sense of accomplishment to see their savings grow. It might even be a better idea to make the container a see-through one, so your child can see the money increase. Don’t forget to talk your child through the maths of it all – after all, money is maths. If (for argument sake) 50p was put in the previous week and another 50p was put in the week after, do the maths with your child before he/she does the honour of depositing the money into the piggy bank. You could use different coin types on different occasions, so your child will come to understand the different ways of making 50p. It will also make it easier for your child to do the addition itself.

Understanding the concept of money

Following on from the first suggestion, it’s always a good idea to have a chat about things, so everyone has a clear idea of the topic at hand before the implementation. Speak to your child about how money is earned and what sorts of things constitute the bills – in general. This can also be put into practice by allowing your child to spend some of its savings from time to time, on things that have been agreed on by you both. You could discuss the available funds, the cost of what your child wants to buy as well as how much would be left in the ‘savings account’ after the purchase. If your child is aware of all of this, it will help him/her make more informed decisions when it comes to spending their money and making demands on your funds as well.

This is especially the case when you go shopping and they want you to make that impulse purchase - that you didn’t budget for!

Also be sure to have your child handle the money on the day of the purchase – this would be after having done the maths at home.

Earning vs. Just Giving

Giving pocket money is nice, I mean who wouldn’t like to get paid for just breathing, but that isn’t the way the world works when it comes to money, unfortunately. We have to go out and earn it. This concept could be (subtly) introduced to your child in different ways e.g. commission / financial incentives for extra tasks/initiatives taken around the home. This would be up to you to think about what could constitute that, then have a chart/log book which your child could manage (cultivate mini book-keeping skills....lol) and reconcile with you come ‘payday’.

These practices can be tweaked and implemented at different ages, for example, if your child is a toddler, you could begin with the ‘toy shop’ scenario where you play customer and shopkeeper roles, then do simple addition with the items in the shop. As they get older you could introduce the concept of giving change.

This could be converted or further developed (as your child grows) into a bank situation, where money is borrowed and paid back with interest.

There are also games like Monopoly, to awaken the investor instinct in your child or just the idea that bills and other expenses or consequences (in the form of fines) are part of life and need to be dealt with.

As your child gets older (10 onwards), you could have them assist you with different (real life or hypothetical) situations e.g. price comparison scenarios, bargains at shops/markets / online, get them to handle minor payments (under your guidance) etc

At a later stage, you can further introduce the different ways that things can be paid for (cards, online transactions etc)

They also need to understand the concept of ‘when it’s gone, it’s gone’, in order for them to think carefully before they make the purchase.

Other ways could be (once your child is older) a top up / pay as you go mobile phone, so the credit on the phone would need to be managed by your child in order for it to last over the stipulated period.

As you can see, the opportunities are pretty much as endless as real-life situations, so there will always be ways to take their knowledge and practices to the next level.

In all of this, remember that you as their parent, will your child’s greatest source of inspiration, so make sure you get your ‘financial act’ together first.

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