Everyone knows the saying ‘you can’t teach an old dog new tricks’.
Well, you can easily teach a young pup and equipping your kids with the knowledge on how to manage their money from a young age sets them up to have good habits for life.
Here are money expert David "Kochie" Koch's top five rules to teach your kids about money.
1. Let them manage their own money
Most parents give their kids pocket money. When you do, let them handle it themselves. Encourage them to keep it safe or saved in a piggy bank at first, so they understand the concept of physical cash.
When they get older or the amount increases, open a bank account and encourage them to make regular deposits. We would come to an agreement with our kids that they could spend 50 per cent of their pocket money, save 40 per cent and donate 10 per cent to charity.They would choose their own charity, which they still support as adults. Teaching the role of charity
at this age sets them up to accumulate wealth responsibly later.
2. Encourage them to budget and save
At first the kids will want to spend all their money at the $2 shop or the lolly counter, and you should let them! Once they’ve realised money is finite, they’ll grasp the concept of budgeting, and saving. Pay teens monthly so they have to make it last over time.
3. Teach comparisonTake them grocery shopping, and explain why you choose one product over another. They might be too young to calculate weight to dollars, but demonstrating how it saves money to take the time
to compare is a vital lesson.
4. Explain jargon
When your child asks a question about finance and its mumbo jumbo, try to break it down for them as best you can. As they grow older, the terms and concepts will become more familiar and easier to grasp.
5. Take them to the bankSimilar to the idea of piggy-banking to show the physical aspect of money, taking them to the bank will leave an impression on just how important it is. Even sitting them next to you when doing any online banking helps.