We’ve recently come across a great article in Canadian-based newspaper The Globe and Mail who ran a story on how to teach children and teens about money.
Here we share the learnings from our Commonwealth cousins:
1. First things first, lead by example
Robin Taub, a chartered accountant and author of A Parent’s Guide to Raising Money-Smart Kids advised that one of the most important ways for parents to teach children about money is to be a good role model. “They’re watching and they’re learning from you so it’s important to get your own financial house in order so you can lead by example,” said Taub.
2. Look for “teachable moments”
We love the idea of looking for “teachable moments” – those opportunities that crop up throughout day to build in a money lesson. From comparing the cost of cupcakes to cookies, or buying birthday presents for friends, these small lessons along the way can build a child’s awareness and learn about money as they get older.
3. Make the subject of money skills fun
We all know that children will more likely want to learn about a topic if there is fun involved. Children and teens are savvy on the web - so why not get them to help out to research and recommend the best deals for household purchases? If you collaborate with your children and get them involved in purchasing decisions such as the next television or toaster, they’ll have a greater understanding of the value of money and appreciate the final purchase even more. For example, ask them to identify what the best broadband internet plans are for the household and work together to come up with the best value solution.
4. Teach them to understand the difference between “need” and “want”
Differentiating “needs” vs “wants” is arguably one of the most difficult lessons to teach our children – after all, it’s a concept that a lot of adults are still trying to grasp. A good approach is to encourage discussion around choices. If your child wants to buy something, have them think about if there is anything else they want and encourage them to choose one or the other - not both. You might also choose to gently remind them of their savings target as well – do they really need another game if it means taking longer to save for that special item?
goHenry empowers your children to independently manage their own money under your rules and guidance. Your children will learn about money by seeing how earning, saving and spending works for them — with a card and app they’ll love to use. And for your piece of mind you can decide how much and where they can spend.