Before children can talk, they exhibit the behaviour of consumerism. Consequently as parents we must equally instill in them a sensible and clear understanding of money. Here are four fantastic ways to begin the process.
1. Explain The Concept of Money
Kids of today are very clever. The sooner we teach them about the concept of money, the better they will be prepared. The main message in this lesson is they understand that money is something they can earn by being disciplined and having good work ethic. By giving them very small tasks, such as setting the table, tidying their toy room or putting their bike away, are all great foundation blocks. You can introduce a small monetary recognition system when they show continuous behavior, and start giving them very small goals. For example, if they love Lego, get them to understand that if they want to buy another Lego man then they will need to do their chores for 3 weeks to save enough to buy one.
2. Teach the 10% rule from day 1
This rule is amazing. If you teach your child that every time he or she earns money that they instantly put 10% of the amount in a long term savings account (or piggy bank) and not touch it, you can agree to count it once a year and be amazed at their face when they see just how much it amounts to. There is no harm saying this is going to buy them a car or some other large item, just to give them an understanding of what the money is being carefully saved for.
3. Understand that Money is not a Toy
Too many times I see young children flippantly playing with real money as if it is a toy. There is nothing wrong with them having fake money in these situations but when I see young children dropping coins in bins or down drains just to see what happens, it makes me worry about their lack of understanding. We need to instill in them a clear appreciation that money is valuable, and it needs to be treated with care and respect.
4. Lead by Example
As adults, we must ensure we are also clearly displaying the same values and understanding that we are teaching our kids. One way to do this very visually is have a jar that the kids can see, and place your extra coins in it whilst saying, "this is going to help towards the food bill this week" or choose some other situation where the kids see you reaching for your wallet. They need to see the link between you also saving, and then successfully purchasing something with it.
As you can see, the above 4 lessons aren't rocket science but each does instill a very important value about money and ethic. If you have read these and thought, "Gee I wish I had done all of these things as a kid," then it's not too late to at least see it being reflected by your own ankle biters. Remember, it's never too late to start saving!