As soon as your child starts receiving pocket money, or income of any sort, you can start teaching them about sensible money management. It is a vital skill, that is not taught widely in schools, but will set them on the right path in life.
Your skills are valuable
If you work hard and do a good job, it is reasonable to expect fair pay. As parents and caregivers, it is important to assist school-aged children with any employment negotiations, so that they are treated fairly. Educate your children that experience/specialist skills may be required for some jobs, so they may start off on a lower pay scale, but can expect to receive raises as their skills increase.
Too many employers see young people demanding outrageous sums or working conditions when they start out, but fairness should work both ways.
If you are paying your children pocket money in return for chores, do them a favour – expect a high standard of work and deadlines to be met without exception. You are instilling a work ethic in them that will last a lifetime and future employers will thank you for it!
It’s up to you to budget
Budgeting is one of the most important money skills you’ll ever learn. Teaching children to live within their means is hard in this “I want” society, but vital to stay out of debt and save money. Teach them how to plan for large purchases and how to increase their income if their eyes are bigger than their financial stomach!
It’s up to you to save regularly
Even if it’s a dollar each week from pocket money, instil a habit of keeping some money in reserve for rainy days and emergencies. Saving is a discipline and a fantastic lifetime habit. Studies have also found that having a savings account improves kids’ social-emotional development, regardless of whether the parents are able to deposit money into it. It gives them a sense of control over their own lives and a positive outlook.
Stay in control of your money
Encourage your children to keep financial independence as young adults, regardless of their relationship status. As they form romantic partnerships, they may be tempted to put all their eggs in one basket and pool finances. While cohabiting couples need a joint account for joint commitments, it is empowering to have one’s own account and to keep savings secure. Relationships can be temporary, but combined debt or irresponsible spending can have far-reaching consequences.
To be in control of your money, you need to understand it! Both men and women surveyed find managing money stressful at times. Things are usually stressful when we don’t understand them, so even if you find it boring, make sure you keep learning about the money issues you need to know. Learning about money means paying attention in math class – and doing your math homework! It means weighing up the short-term and long-term spending options for your pocket money. It means asking the opinion of people that you respect – and never putting any money-related issues in the “too hard” basket.
Money is important to be comfortable and happy in life – but it is still eventually only a means to an end. Teach your children balance, so they neither focus too much or too little on the importance of money.