Helping your children become financially literate

Raising a financially savvy generation is the responsibility of every parent. Here’s how you can teach your kids to be smart with their money and learn the true meaning of financial responsibility.

The first thing to remember is that teaching your kids about money is a long-term game. There are no crash courses or shortcuts to help them understand the true meaning of economic success. This is something they’ll likely pick up over time (with your help) and can be an invaluable lesson on their journey to financial independence.

With that, here are three easy tips you can use at home to get their monetary minds buzzing.

Showing is better than telling

Kids are remarkably good at picking up the things you don’t say. They observe your mannerisms and attitude, so teaching them about financial responsibility starts with setting a good example with your own spending habits.

Try to avoid leaving large bills lying around the house or boasting about lavish purchases as this can undermine the value of saving. Make sure your kids understand that money is a limited commodity that needs to be rationed and secured. This also extends to how you talk about household finances with your partner while kids are present.

Start a secret piggy bank or savings plan

It can be hard for kids to understand the long-term benefit of saving, so doing it for them and then showing them the end result is a great way to build motivation. Whether you have adult children paying board or young kids collecting money for household chores, leaving a portion of it aside every month and then surprising them with a lump-sum is sure to lift their financial spirits. Plus, it can teach them the discipline required to save up for high-ticket purchases.

Show them how to protect their assets

Insurance comes in many shapes and forms, and it’s not just a boring ‘adult thing’. Extended warranties or servicing agreements can be purchased with most electronic devices such as video games or headphones. These can be a great way to show your kids two lessons; the importance of paying a little extra upfront in case the unexpected happens, and that the true cost of any item includes a safety net to replace it. This is especially relevant for adult children buying their first car as their car insurance premiums should always be included in any budgetary discussions.

Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation.

To discuss creating a financially secure future for your family get in touch with the team at ADR Wealth.

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