IS YOUR CHILD MONEY SMART?
"Save your money and your money will save you" - Jamaican proverb.
You can develop your child's understanding of money and finance so that they are money smart throughout their lives.
Explain to young children how we use money to buy things and how it can be earned. Let children know that things cost money, sometimes a little and sometimes a lot, so that when you buy something you have to consider this.
Involving your child with the shopping encourages them to compare prices. Consider bargains and discuss your reasoning behind the choices you make. If your child enjoys playing shop, up cycle empty food packets for them to price, sell and even create special offers.
Explain how banks work and how credit cards are a different way of spending. At the same time discuss how banks may offer you a loan for buying very expensive things such as a house and how you have to pay them interest. Help them to understand that a taking out a loan has to be a very deliberate and considered choice.
You may decide to give your child pocket money, which they could earn through completing chores at home. Help your child research and compare prices on the items that they are saving for. Another activity could be to plan a party (real or imaginary) or a day out with a given budget. For this you can research and make informed decisions together.
The following strategy may also support your child to be money smart and make good
choices with their money:
Don't let your money melt away - SPLIT IT!
Live within your means
Impulse buying is bad
Whilst helping children to understand that money does "make the world go round" it is also important to develop their responsibility for managing their money sensibly. "Do not educate your child to be rich. Educate him to be happy so when he grows up he'll know the value of things, not the price." Anon.