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Teaching Your Kids About Money: A Lesson for Life

Money plays a crucial role in our lives. It can bring us happiness, comfort, and peace of mind. As parents, it’s our responsibility to teach our children the value and importance of money. It is something that I am really passionate about, and whilst it is part of my job it is also my role as a good mum to teach my kids everything I can about money. 

My boys are all in the twenties now but, as you know our twenties are when we are really learning the ways of the world and how to handle our money is no different. So their lessons continue but now it is about adding to their retirement savings, saving for a deposit for a home and learning how to live within their means.  

Continuing the lessons I started with them as toddlers. 

In a world where money is so important, teaching kids about budgeting, earning, saving, and investing at a young age is crucial.  

Let’s have a look at why it’s essential to teach your kids about money and some strategies that I have used with my own kids those same strategies that I talk about with all the families I work with now. 

The truth is that regardless of their age, it’s never too early to teach your kids about money and its importance, in fact the earlier you start making money a normal part of conversations the more comfortable our kids are going to be around money and the better they will be with their money as adults. 

Start Early

It’s best to start teaching your kids about money as early as possible. Whilst really young children don’t have a concept of what money is, if you start to talk about money in terms of dollars it will become a very normal process for them. 

This really hit home for me one day when my eldest was only about 3 years old. I remember saying to him, “I haven’t got enough money to buy that today”. His response was, “but mummy you just go to that machine in the wall, and it gives you money, why can’t you do that?” 

It was then that I realised he was this little sponge that was taking in everything so I needed to make sure what he absorbed about money was positive. 

From that day forward no longer did I say “we haven’t got enough money to buy that today” I talked more about “that is $10, and mummy needs to save to buy that so how about next week we find a way to save some money so that we can buy it then.”  

He still didn’t know what $10 was or what saving for it meant but it planted the seed for later on. It also put a positive spin on money rather than a negative. 

As soon as your child can understand the concept of money, you can start teaching them basic financial principles such as saving, budgeting, and spending wisely but in a slow and steady way. Use examples that are relevant to them. Don’t talk about the cost of groceries talk about the cost of toys they may want, food they want or places they want to go. This is relevant to them. 

For me this was when they started counting at school and started to understand what the value of a number meant. 

As your child grows older, you can introduce more advanced topics like investing and credit.  

Remember kids who learn about money at a young age are more likely to make better financial decisions as adults. 

The truth is, schools don’t teach financial education, which means that they rely on us as parents to provide the initial foundation of financial understanding. 

Forget the beautiful pink piggy bank. 

The beautiful pink piggy bank might look great, but kids are visual learners, and what better way to encourage them to save money than with a clear jar? Or two. 

Not only will it allow them to physically see how much money they are accumulating, but it also creates a fun and interactive experience.  

The kids can decorate their jars with stickers, markers, or paint, making it a personal project.  

As they add more money to their jar, they will feel pretty excited and motivated to continue saving.  

Plus, when they do reach their financial goals, they will feel proud and confident. Using a clear jar for kids to save in is a great way to teach them the value of money and the importance of saving. 

Understanding the Value of Money

Teaching our children about money can be a daunting task, especially when it comes to showing them how much things cost.  

Though it may seem like a small thing, it’s important for our kids to learn the value of a dollar and the concept of spending wisely.  

With the rise of online shopping and the convenience of contactless payment options, it can be easy for them to assume that money is unlimited, but that is far from the truth.  

By taking them on a trip to the supermarket or simply showing them a receipt, we can begin to open up the conversation about money and how it plays a role in our everyday lives. It may not be the easiest lesson to teach, but it’s one that will carry with them into adulthood. 

Teaching them the value of things and the cost of living can help them appreciate and understand what it takes to earn a living.

As they get older and start a part time job ask them to calculate how many hours they need to work to buy things that they want. When they can related how long it takes them to pay for something it really does make them think about the importance of what they are about to purchase. 

Delayed Gratification

In a world of instant gratification, teaching your kids to delay instant satisfaction is a skill they will benefit from in the long run.  

As we know the endorphins or happy hormones are triggered when we are about to buy something, giving us a little high but disappears as quickly as it came. 

It’s important that children understand the concept of saving up for something they want, rather than impulse buying or reaching for the credit card.  

Helping your children set goals for purchases can turn it into a fun project and can teach them about budgeting and planning.  

This will also help them build a strong sense of self-discipline and self-control. 

Encourage Financial Responsibility 

When kids are taught about money, they learn to be responsible with it.  

They learn the value of a dollar and what it takes to earn it.  

They learn how to budget, save, and make smart purchases. Kids who understand the importance of saving may be less likely to splurge on impulse buys, and therefore have more money towards their financial goals. 

Avoiding Debt

Teaching your kids about money can help them avoid falling into debt traps.  

With Buy Now Pay Later schemes, credit cards and loans readily available, it’s easy for people to live beyond their means and get trapped in a debt cycle.  

By teaching our kids to live within their means and avoid debt, we can help them avoid financial stress in the future.  

It’s important to teach our children about credit cards and loans as well, so they understand the risks and consequences involved. 

Strategies for Teaching Kids About Money

Money may seem like a complex subject, but it doesn’t have to be boring.  

Make learning about money fun and engaging. For example, you can create a savings jar or play games that involve money management concepts. Involve them in your money-related decisions and help them in making decisions about their pocket money. It will, in turn, lead to an important learning experience without getting bored or burdened. 

Ultimately, teaching your kids about money is about helping them build a stronger financial future.  

The earlier you start, the more time they have to benefit from sound advice. By providing your children with a solid financial foundation, you’re giving them the tools they need to make smart financial decisions and to achieve their goals. Whether it’s saving up for holiday, buying a car, or a home, they will have the necessary skills to make their financial dreams a reality. 

As parents, it’s essential to teach your kids about money. Starting early, teaching financial responsibility, creating a foundation for the future, make learning fun, and imparting lifelong lessons are some of the critical aspects of teaching children about money.  

By doing so, you’re raising financially responsible children who will make better decisions about money throughout their lives, leading to a more stress-free, secure, and more positive view of money in their lives.