We teach our kids to read and write but there's no one teaching them about the value of money and all things financial...
Financial literacy is super important for children, teenagers and young adults alike as understanding it's value is crucial in the world we all live in! It can be hard to know where to start though so here are a few tips:
1. Pocket money isn't a handout, make them earn it by contributing to household tasks to prevent entitlement... Don't forget to pay up regularly though or this one will be short lived! Once they've earned it, how will you pay, what are your household rules on spending? Get clear on your family philosophies surrounding money! Ours is third, third, third - saving, spending and other (I'll expand on other later)! And don't forget to start with a savings goal - this one is important so they have something to work towards and can see the benefits of letting it grow...
2. Take your kids to the bank to open their own account. Don't just do it for them, they need to understand the banking system and the earlier they're introduced, the more comfortable they will be! With technology levels today, we need to instil the importance of building these relationships with banks and other advisers from an early age... It's a great learning exercise but be ready for 50 questions! Talk about fees and interest, how the bank holds their money (security, safety, how they track of everyone's money - electronic ledger) and importantly - how to
get it out and how to check their balance! This is a fabulous learning process for kids of all ages!
3. Get your kids thinking about selling or gifting any unwanted and unused toys and games. This will teach good habits of letting go of things they don't need from an early age and the value of items - depreciating and appreciating (assets we'll call them later in life) leading to what are good things (aka investments) to spend your money on... I know this sounds crazy, but no one else is going to teach your kids this stuff except YOU so give them a head start in life so they don't have to figure it out the hard way like most of us did in our 20's!
4. Start encouraging an entrepreneurial mindset now, ask if they can think of any other ways to make money? Could be babysitting, mowing the neighbours' lawn.... This is particularly important as our kids grow up in the technology age where thinking outside the box and problem-solving may be the only thing that keeps our children engaged in meaningful employment or a successful business given the changing world of automation they'll experience.
That's it for now...
TAXCHIC OUT. x
