Keeping it in the family

Passing on good fiscal policy as soon as possible to your children is one of the biggest gifts a parent can give to their son or daughter.

Teaching kids about money, this can be one of the most challenging things we do as parents.

kid
The expression ‘herding cats’ certainly comes to mind when I think of money lessons for kids. However, this can be one of the most important and beneficial lessons for our kids and if done well will become a lifelong skill and hopefully your kids will thank you for it.

The key to teaching kids about money is to make it easy and fun. Learning about money can be as easy or as hard as you wish it to be but if you tailor it to their age it will make life easier for you both.

Let’s have a look at a few easy things we can do to make this happen.This includes our own finances. While this can be a bit of a challenge, you’ll find kids will have a greater appreciation of where all the money in the house goes.

Include things such as your mortgage payments, how much you spend on groceries as well as the normal household bills. The biggest challenge for kids is that they generally don’t have a good understanding of what things cost. The down side to this is if your kids are older, they may hang around longer because it is to expensive to move out.

If you are planning on a new major purchase include the kids in the discussion. You could also include in this your next holiday.

Show the kids how much the overall cost is and explain to them how long it is going to take to save up for it. This will give your kids the idea of financial goal setting. Once you have done this you can put it in their terms.

A good one can be a new Play Station or XBox game. Show them how much the game is and explain how much they will need to put aside out of their pocket money each week to pay for it. If they want the game sooner they will need to make a greater sacrifice by putting more money aside. Sounds very simple but the simple things will stick with them forever.

Get a job. Ok, I know I sound a bit like a former federal treasurer there so perhaps I will explain what I mean. Not all kids will be old enough to go out and work at their local fast food store so let’s give them some jobs to do around the house.

Draw up a jobs sheet with each job earning a certain amount of money. You could start with cleaning their room being worth $1 all the way up to a job that really gets on your nerves paying the most.

As the kids complete the job tick it off and this will go into their “pay” at the end of the week. Your kids will soon work out that the more work they do the more they earn. Sounds almost like the real world doesn’t it, just don’t be a mean parent and take “tax” out of their pay.

Now the kids have a new found wealth, what are they going to spend it on? Like us they should be putting some into a saving account for future use. Make sure they keep some aside to actually spend though.

And in this comes another lesson. When mom and dad are paying for things kids tend not to worry about the cost – they just want it now. No point waiting for the special which starts next week, they want it now. It is amazing how much this changes when it is their own money.

Teach them the benefits of looking for the best prices on items. The internet, catalogues and coupons will become their best friend.

Hopefully there are a couple of ideas in here which will start the discussion around money with your kids. Some of these can be good fun to teach and you never know you may even decide to use some of them for your own finance.

Visit peardfinance.com.au

About peardrealestate

Peard Real Estate is an award winning network of boutique offices throughout Western Australia delivering innovative property solutions, services and results for home owners, landlords and investors.
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