“Money doesn’t grow on trees” – how many times have you said that? It’s usually the first financial lesson given to children! Here are 8 other simple lessons that will help your children, from an early age through to adulthood, to develop good financial habits. These are the lessons you now wish you had at a young age.
1. Look after the pennies and the pounds will look after themselves
One for the younger children. Explain to them how all money has a value and that each of those small amounts will add up for them down the road.
2. Start saving
Encourage your kids to start a savings habit from the time they get pocket money. The key here is to actually spend the savings from time to time, so that your children then experience the rewards from saving money.
3. If it looks too good to be true…
Teach your children to avoid impulse purchases of “great deals” without looking at them closely or talking to you first. Someone is making money, and it’s rarely them.
4. Know your value as buyer
Make sure your children understand the power they have as a buyer. Buying “stuff” is a series of trades. Teach them to check for discounts and that a bit of haggling never hurt anyone.
5. Learn from my mistakes!
Tell your older children about financial mistakes you made yourself and lessons you’ve learned about managing money better. Maybe you made a really careless and expensive purchase that you later regretted.
6. Avoid unnecessary borrowing
As your kids get older, the use of debt starts to arise. Do they need a credit card while at college? If so, teach them good habits and the importance of paying it off in full each month. Maybe by borrowing (from the bank of mum and dad) there I said it, to pay their gym subscription up front will result in big savings, rather than paying it monthly. Teach your children to examine each debt situation in detail, looking at the cost of borrowing as well as the benefits of the purchase.
7. Have a plan
While they might not need our services at a young age, children should be taught about looking at the longer term and bigger picture, making careful financial choices and having a plan to guide them.
8. Be secure
Talk to your children about good security habits around their bank accounts, cards and passwords etc. Explain the dangers of sharing financial data – how friends have fallen out unnecessarily over money, to be careful using ATMs and how cards can be skimmed etc. Teach them about good online habits and the dangers of scams such as phishing. The big lesson is – for them to talk to you if they’ve any doubts at all about any financial situation…
If your children follow these lessons, they can look forward to a more prosperous and safer financial future.
For more advice, check out the rest of our blog. At Gallivan Financial, our team of experts are always on hand to help. Get in touch today. We’ll be delighted to hear from you.
All the best,
The Team at Gallivan Financial