03Oct

What You Should be Teaching Your Kids about Money

Some parents forget about the importance of teaching your kids about money from a young age so that they can develop good habits when they get older. This doesn’t mean that you have to teach them about loans, budgets, and taxes right away, but basic skills so they have a fighting chance in the real world and hopefully don’t have issues with money as they get older. The ideas below are merely suggestions about how you can teach your children about money without them being bored or not understanding.

If you wondering when a good time to start is, the answer would be as soon as possible. At a young age, children begin to understand the concept of money. They will soon comprehend and watch you take money out, why you go to work, and why you aren’t able to do some things because you may not be able to afford it. When they begin to realise that they can use money to buy their own things, such as candy and toys, money begins to have more value to them. It is important to emphasise that they may have to wait for certain items until they have enough money.

An effective tool to show them the value of money before they can start working themselves, is giving them an allowance. The best thing to do is not just give it to them or give them too much but let them work for it. This may seem obvious for some parents but this holds greater value than you might realise. Giving them an allowance shows that if they work hard, they can earn money to save or spend, which becomes very valuable later in life.

When they become teenagers, they will understand the importance of a job and if they really want bigger and more expensive items they need to work for it. If you have a KiwiSaver account, you should talk to your kids about starting one when they begin part-time work. If they get into the habit of depositing into it early, they will continue to do so throughout their working life.

Now, as they become young adults where bank accounts, credit cards, and debt are more relatable to them, it is time to relay more information to them. Sit your young adults down and explain what interest and penalties are so that they are never surprised and have a lack of understanding of how money works as they get older. Teaching your kids about money throughout their life will always be beneficial to them and even though they will probably make some mistakes on the way, you at least help guide them to make some right ones.

Disclaimer: The above information is general in nature and not intended to be advice. You should consider seeking professional advice before following any suggestions in this blog/website.