5 Tips to Teach Your Child Money Smarts
The most important thing for any parent is their child’s success and happiness. While good values, healthy eating and strong work habits are usually at top of mind for most parents, some neglect to share with their kids one of the most important life skills – money management.
You can put your family on the path toward financial success by following these five tips:
1. Start early:
Give your children a head start in life by teaching them money management skills that will last for a lifetime. It’s never too early to start. With young children, begin with basic concepts—for example, that people have a limited amount of money to spend. As they grow older, introduce more advanced concepts, such as the difference between needs and wants, budgeting and saving, and tracking expenses.
2. Set up savings goals:
Next time your child asks you for the latest video game or clothing item, make it an opportunity to set a savings goal. Curbing impulse buying and establishing saving habits early can help avoid over-reliance on credit and debt problems in future years.
3. Discuss needs versus wants:
An important step in teaching children how to manage their money and spend wisely is to discuss the difference between needs and wants. Learning to buy the things they need before buying the things they want will help kids prioritize expenses, save for the future, and live within their means.
4. Rely on teachable moments:
Everyday activities can be used to provide practical lessons in money management. Before going shopping or running an errand, set a budget and make a list of items you’ll buy. This will show your children that planning for expenses should be a routine activity.
5. Lead by example:
Children learn by watching and imitating their parents. By modelling good spending and saving behaviour, you will encourage your kids to pick up your good financial habits.
More information is available online at itpaystoknow.gc.ca.