Money. Even the youngest children soon realise that money is important in life; they witness their parents paying for goods in shops. As a toddler one of their earliest toys will be shop related and they will delight in counting and handling play money. These games will become the foundations of their life.
Soon they will grow old enough to expect pocket money; here is where the lessons start. First it is always advisable for children to earn their weekly allowance, let them understand that nothing comes for free. Even the youngest children can handle a little job, make it like a game and you will all have fun.
From that first allowance teach your child that it is important to save some of it. Initially use something like a piggy bank, the youngster will know the money’s safe and will in time feel that piggy get heavier and heavier. At this stage of life you do not want to physically take the child’s money away, they do not have the capability of understanding a savings account. To them the money has gone, that weekly ding’ as a new coin is put in means a lot to them.
Time passes quite quickly and soon the day arrives for a visit to the bank to deposit piggy’s’ savings and open an account. It is from this moment that the older child should understand the importance of putting money away for their future. A percentage of everything they earn from this day forward should be saved, plus persuade them to put away any cash sent as Birthday or Christmas presents. As an incentive let them know if they really needed to withdraw any money from their account, it can only be from the present cash amounts.
All teenagers should be encouraged to take a part-time job; apart from earning a small wage it teaches responsibility and independence. Again ensure that they save some of their money, by now this little nest egg should be building up quite nicely. To see this figure grow is usually what it takes to encourage your children to save more.
Life is difficult enough when you are a child but no one knows exactly what enters a child’s brain when they hear all this recent news about the economic downturn. If possible depending on the age of your children sit down together and discuss the financial news of the day, they may be hearing more than you think.
As they grow talk openly about credit cards and the importance of managing an account, handled properly this helps towards obtaining a good credit score. These factors will come into play when applying for a mortgage.
It is always so sad to see young people living from paycheck to paycheck with many maxed out credit cards; all it takes is a few life lessons when young to help start them on that financial ladder of success.