Many adults, myself included, are navigating life through the aftermath of poor financial planning in our early adulthood. Because of this I have always been passionate about encouraging a sound understanding of finances in my children, so that they may be able to avoid some of the bad decision making I undertook. Research shows that many of our financial habits are actually formed around the age of 7, so it's never too early to start focusing on financial literacy.
Here are some quick & easy ideas to help.
*Encourage thriftiness
We live in a society which has become heavily focused on disposable goods, fast fashion and replacing items with new ones rather than mending - all of which can contribute to excessive and unnecessary spending. Encouraging children to take pride in repairing items or looking after them well in order to avoid having to buy new ones can be a great habit to teach.
*Introduce them to the joy of saving & contributing
The sense of satisfaction that comes from purchasing an item you really want for yourself can be a really strong motivator when it comes to financial independence, and although it can be tempting to buy our kids the things they want in order to treat them - we're actually doing them more of a favour by encouraging them to earn the money by way of household chores, or saving it by saving their pocket money. If the item is something bigger, then even agreeing to match their contribution can be a good motivational tool. Recently my kids have discovered selling unwanted clothes on selling apps and they love this - they get involved in taking the photos, and sending the parcels - and the money they make is theirs to keep! This not only encourages financial skills but resourcefulness too.
*Utilise financial games
The obvious choice is, of course, monopoly - from counting the cash to paying rent and fines, this classic board game has so many valuable opportunities for practicing financial skills - definitely one to play regularly.
*Get them involved in your own financial chores
Having my children present while I'm sorting through our own finances in another way I try to bring financial conversations into every day life. Whether it's discussing our families monthly budget with them, and demonstrating how we organize our money or whether it's just having them sit close by with their own activities while I sort through my own accounts or send enquiries regarding freelancer accounting services, they will naturally ask questions about what I'm doing and this can be a great way to gradually build up their familiarity with the subject.
*Open a junior account
Giving children their own account can really help to encourage financial independence and decision making. Not only does it teach them to be responsible for their own bank card and PINs, but it also enables them to keep an eye on their account - tracking their income and outgoings, and allowing them some financial freedom to learn and make their own choices.
And finally, and perhaps most importantly, encourage honest and open conversations around finances. I was raised to think that money shouldn't be discussed around children but I think this does them a huge disservice as, while we don't want our children to be burdened with financial worry during their childhoods, it can be hugely beneficial for them to understand that sometimes money is low and so cutbacks need to be made. This helps to foster a sensible approach to money management, rather than encouraging a "money grows on trees" attitude.
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