Teaching your children about finance at home
With the world in lockdown, children are spending their time at home. Some children are being taught via online classes, but many are not. If you are one of a number of parents that are home-schooling their children unexpectedly, then we’ve got some exciting teaching tips coming right up. One of the oft overlooked subjects is finance. With your kids at home, here are some ways you can teach them to manage their money, making it fun while you’re at it.
Counting the coins
One of the easiest ways to get a child’s attention when teaching them something potentially boring, is to make it a physical interaction. When it comes to finance, there’s no better way for teaching children about how much money they can earn (and lose), than by handing them the coins directly. Give them more pennies, or take them away, as the lesson dictates and we’re sure they will have caught on in no time at all.
This may sound a little strange, but it does work. Using popular children’s books such as Harry Potter or classic tales like Jack and the Beanstalk, are the perfect way to help illustrate the finance point you are trying to make. These stories don’t just teach children the basics on how much change you should get back, but probe deeper to discuss risk versus reward. In this way you can start getting them to think about investing rather than spending.
Providing children with pocket money is a sure-fire way to help them learn about finance, and learn quickly! This one teaches them the concept of delayed gratification. Gone are the days where the child can simply ask you for what they want – now they have to save up and earn it. Not only that, but they’ll learn that money takes time and effort to accrue so they’ll value it more as well as their purchases.
Options for older children
For older children, finance lessons can take an additional step. For instance, it can actually be a good thing to get your child a bank account. In this way they will learn directly what it takes to save money. You can get them a Junior ISA with Interactive Investor for instance, and add any of their savings to their account. Better yet, they can’t access it to spend it, with the ISA only paying out their savings once they turn 18.
Reaching the teens
Teenagers are the hardest group to teach finance to. Many will already have minor jobs and be happy in their spending, but they might not realise the value of what they have. For this group, it’s a good idea to start teaching them the dangers of credit cards, helping them learn about contentment from their purchases and even get them to set a budget. Bringing an awareness of compound interest is also the best way to get them saving.
Finance is such an important factor in our lives that many of us take it for granted, assuming our kids will grow up with the same mindset. But they will only do so if you teach them! Throughout this article we have outlined a few things you can do to pique their interest in finance and in saving their money, all from the comfort of home. Of course there are more things you can do too.
You can start a savings jar containing pennies, that everyone can see increasing as the days go by. Show your children how much things actually cost as well. It can also be a good idea to promote, and demonstrate, restraint when it comes to buying, particularly now we’re all stuck inside. Finally, it’s a good idea to remind children that giving is good too and that charitable causes should be helped, not just saving it all for themselves.