Today – Teaching your child to be cash savvy
Teaching your child about money is extremely important. Studies show that kid’s long-term spending habits are set by the age of seven. So, you really need to get started as early as possible when it comes to educating your children about money.
Set up a savings account for them
When it comes to long-term saving, you will need to get the ball rolling on behalf of your child. If at all possible open a savings account for them when they are a baby or toddler. Junior ISAs can be an especially good option. You can learn more about them and other types of ISAs by clicking here.
Timing what you teach your children about money
The study that showed that kid’s spending habits are more or less formed by the age of seven was carried out by Purdue University. They looked at children’s understanding of and attitude towards money at various ages. This revealed some interesting facts. Information you can use to work out exactly which money skills you should be teaching your children, at each stage in their life. Below, is an overview of those various stages.
Lead by example
But, before we get into them, the most important thing you need to do if you want your children to learn what they need to know about managing their finances is to lead by example. The study conducted by researchers at Purdue University revealed that they get their spending habits from you. If you shop with a list to make sure you only buy what you need, the chances are your children will do the same.
By the age of 3
At the age of 3, most children have a reasonable understanding of what money is. They are capable of understanding that they need money to be able to obtain the things they need or want. In the past, the fact that you handed over cash in shops meant that this concept was easily understood by children. Now, we pay by card so often, you may need to help them a little more to make that connection.
Using a piggy bank can work really well. Give them a small amount of money each day to save up to buy something small that they like. Once they have what they need they can go out and hand the money over themselves and receive their treat.
This is also when they will start noticing how you treat money and spend it. So, if you have bad habits, changing them while your child is still a baby is a very good idea. That way, you won’t inadvertently pass them on to your children.
By the age of 7
At this stage, your child’s spending habits are more or less fully formed. But, this is when you really need to step things up a notch. Give them money-related puzzles to solve and help them with their maths skills.
At the age of 13
As soon as you are able to do so, open a bank account for your child and let them manage it. Initially, with your help, later they can take over completely.
Use games to help your children learn the value of money
We all learn more easily when we are having fun. It is just human nature. So, why not click here and read about some great games that have been specifically designed to teach your children about money.
I do hope you have enjoyed this post on teaching your child to be cash savvy