Knowing how to manage money is a lifelong skill – one that will see our children through good and bad times. But it’s a skill that should be taught from an early age. Financially responsible adults don’t just emerge like butterflies at the age of 18, they need a little help to find their wings.
Some schools may do their bit to teach financial literacy, but it’s ultimately your guidance that’s needed. In a recent survey in the US, 94% of students asked said they learnt their financial information from their parents*.
At WorldRemit we’re passionate about supporting education in whatever form it takes. And as a money transfer company, we’re delighted to bring you a few tips to help you teach your children to be money savvy as they grow into adults.
1. Let’s talk money
“Not in front of the children”.
Many parents may well say this when family finances need to be discussed. But to nurture a child who’ll be in good financial shape as an adult, it’s really worth starting the conversation early – without, of course, bringing up any real financial worries.
So, consider chatting with the kids from an early age about routine purchases (food, energy), and paying for education, transport and holidays. Discuss the difference between the things you need such as food, shoes, water, heating and the things you want - holidays, iPads and the latest trainers.
When they’re young take them shopping, look at the price labels and pay for items with cash, rather than paying with a seemingly ‘magic’ credit or debit card. Cash is a tangible thing - once it’s used, it’s gone. Kids need to learn that.
2. Introduce them to money
As soon as your child can count is the time to introduce them to money. Show them notes and coins and teach them the value of each one. Best of all, play some money games with them – engaging games to help them understand the value of coins, how to count money and work out change.
You can play these games online or as board games. Monopoly is an old favourite that not only gets children handling money but also teaches them the basics of investment. You can also create your own homemade games. After all, what child doesn’t love setting up and playing shop? Play and learning really can go hand in hand.
3. Get them budgeting
Whether your children earn their own money with an after-school job or get gifts and pocket money from you, it’s worth introducing the idea of budgeting early. And make it fun!
Yes, budgeting really can be fun if you draw up a colourful chart for them the fill in. Two columns ‘money in’ and ‘money out’.
For younger children, they can put their money in three different money out piggy banks – money for spending, for sharing/gifting and for saving.
By budgeting, your children will begin to take more personal responsibility for managing their money.
4. Working for the things they want
When your child sets their heart on anything from a book to a bike, instead of instantly reaching for your credit card – encourage them to earn the money for themselves. No one wants work interfering with their studies or play, but there are small jobs your child can do to earn a little and pay for the things they want.
Young children can top up their piggy banks by doing household chores. Tweens (10 to 12-year olds) can do paper rounds, babysitting or gardening. And older teens can get part-time work in shops and restaurants and holiday work in holiday camps etc. The benefit of this? To give them the responsibility and self-satisfaction of earning their own money and saving from a young age. In this way, they can really understand and begin to appreciate the value of money.
5. Start them saving early
It’s important to teach your children that however much money they may be given or earn– they don’t need to spend it all at once. Far better to set some goals and save for the future!
So, help them open a savings account - a digital savings account may be best. After all, our children will be doing most of their banking online in the future. The earlier you get them managing their finances on a computer, tablet or mobile phone the better.
Once they have a savings account – you can look at the monthly statements with them – and explain how the account grows because of deposits and interests. Encourage your older children to put larger sums away for something they really want like a new bike or computer.
By saving your children will learn how rewarding self-discipline and goal setting can be.
6. Spending, not overspending
Now comes the really fun part. Once your child has saved the right amount, they can go shopping and then spend all or part of their spending budget. Of course, advise them not to overspend. But as long as they’re mature enough, it’s best to leave the purchase decisions to them. They really need to be in control of their own decisions when it comes to money.
If you help them become smart spenders, you’ll instil in them some valuable lessons about how personal choice relates to managing money.
Sending and receiving money with WorldRemit
When your children get to the age of 18, they may well be going away to study or start their first job. They may even be off on their travels. And so, it’s a time when they may need to send money to or receive it from overseas.
That’s where we come in. We offer a fast, secure and low-cost online money transfer service from over 50 countries to 150 worldwide.
If your child is travelling, they may also need to send them money to themselves while away. We can help them with that specific service too. Read all about it here.
So, for all their future money transfer needs, make sure you introduce them to WorldRemit. With bank-beating exchange rates and low fees, we’ll take care of them well.
*Youth and Money Survey, American Savings Education Council.