Money doesn’t grow on trees you know! Have you ever heard yourself say that to your children?
Well, it’s never too early to instil some good money-saving habits in your kids.
Where does it come from?
As far as your child is concerned, you are the provider of all things. Young children don’t understand about boundaries and limits. They need to learn the rules of exchange, and that while you may give them things without asking for anything in return, that’s not how the external world operates.
One way that many parents start to teach their children about giving in order to receive is by assigning chores. Obviously these need to relate to age, height, ability and endurance. It’s no good asking a three-year-old to wash the car. He or she may be happy to splash about with a sponge, but contact with the car may be entirely down to chance! It also may not be appropriate to start very young children off with money as their reward – a go at an electronic game, or extra TV time, might work better. It’s easier for them when they see an immediate reward for their endeavours.
As they grow older and can take on chores that really help run the household, it may be time to think about a weekly sum of pocket money, based on how well chores have been completed. Kids generally respond well to a wall chart listing points or stars for achievement, and when there is more than one child in your family, the element of competition can help.
Teach your children how to use their pocket money wisely. Learning how to save and budget early on helps establish habits that are likely to stand them in good stead throughout their lives. Explain their choices for how they might use their pocket money, according to their interests. Show them how they can afford something more expensive by saving up their pocket money for a month or so, perhaps in an old-fashioned piggy bank. When your child has had to save for something, or been encouraged to think of doing more chores to make money faster, he or she tends to grasp the concept of saving and work quite quickly.
Ryan O’Connor is the creator of the online personal finance magazine and blog at www.savingmoneyexpert.com.au. Drop by for more great ideas on saving, budgeting tools and more.