Teaching your children financial management

You may be thinking of the right age to start to inculcate financial management skills into your children.  You cannot tell the exact age but the truth is that a child is not too young to be taught financial management skills.

 As soon as a child is old enough to begin to count with fingers as it is peculiar with children, start thinking of equipping your child with the basics of money management.

 Teach your children financial principles in accordance with their age’s void of complicated explanations of income tax, the stock market or economics. 

You can make it a fun, keeping it as simple as possible ensure that you do not bore them with too much details like the poor state of the economy, that can easily disrupt the message you are trying to pass across.

 As little as your children are, you can involve them in your financial planning and budgeting, take your children along with you for shopping, let them learn from the way you spend money and make choices having it at the back of your mind that they will imitate your attitudes towards money and its use .

 Teach them to be responsible with money by being responsible yourself.

 When you choose a particular brand of product ensure that it is worth its cost and explain to them the reason behind the choice. Make them know that you are not picking that brand because of the name but the value.

 They may not understand everything you try to tell them, but simply making them realise that there are different brands and price options will help them develop critical skills as consumers when they are old enough.

 Educate your children as they grow up about your values concerning money, savings and judicious spending.

 Try as much as possible to let them know the difference between needs and wants. You don’t have to succumb to their pressures of wanting new toys when they don’t necessarily need them. Cultivate the habit of saying “No” to some of your children’s demand.

Explain to them and let them know why they should attend to their needs before their wants and make them know that you are not attempting to deprive them of the good things of life.

You can use their pocket money and everyday experiences to build your child’s foundation for a financially responsible adulthood.

Give them pocket money and encourage them to budget, put aside some for savings to buy some things for themselves and also account for the way they spent the rest. This gives them a sense of responsibility and independence.

You can take your child of about 10 years old to the bank, teaching him or her the act of savings and the use of the ATM. Ensure that you make them understand that you have to work to have money to save so as to have the one to withdraw when the need arises.

Also consider opening savings accounts in their names and paying at least part of their pocket money into the bank. Not only will this help them learn how banks work, but it will also help to prevent buying unnecessary items  due to excess cash available to them.

Encourage your children to set goals to prompt them to save towards such. Allow your teenage children make their spending decisions on their own. They will learn from their spending choices. You can then initiate an open discussion of the act of spending money.

Advise them to judiciously manage their money well to avoid borrowing and getting into debt, letting them know the consequences of getting into a habit of debt.

Delayed gratification and dignity of labour is one lesson you should teach your children. Teach them to have patience handling money and reward them with stipend for a job well done.

Good money habits learnt early in life can save your children from making money mistakes later in life.

Hope Ikwe