Teaching kids about finances is essential, in fact, it would be worthwhile having it taught in schools, but as we’re not there yet, this one is down to us as parents.
Smart money lessons are so important for empowering young minds to make informed financial decisions as they grow into responsible adults. By providing a road map, we can equip them with the knowledge and skills they need.
It's never too early to start, even preschoolers can begin to understand basic concepts like saving and spending. You just need to use age-appropriate activities and conversations to introduce these ideas in a fun and engaging way. Consider using games, stories, or even a pretend store to make learning about money enjoyable.
A big part of financial education is understanding how to budget. Show kids how to create a budget by setting aside money for different purposes, such as savings, spending, and giving. Encourage them to track their expenses and stick to their budget. This early exposure to budgeting will help them develop responsible money management habits.
Teach your child that money is earned through hard work and responsible choices. Explain the concept of earning money through allowances or chores and encourage them to save a portion of what they earn and spend wisely. This helps them appreciate the value of money and understand that it's a finite resource.
Set up a savings account for them and encourage regular deposits for both short-term and long-term goals. One of the most valuable lessons kids can learn about money is the power of delayed gratification. When they save for something they really want, rather than making impulsive purchases, this will help them develop patience and discipline, as well as a real sense of achievement when the goal is achieved.
Help children differentiate between needs and wants. Explain that needs are essential for survival, like food and clothing, while wants are things that would be nice to have but are not necessary. Responsible spending is about prioritising needs over wants in their budgeting decisions.
There is a great tool available called An Post Money Mate that will help you teach your children money skills. It’s a debit card and app for kids aged 7-15 that encourages firsthand learning by allowing children to make their own financial decisions (you remain in full in control of how and where they spend). You can help them earn (through chores), save (by putting money aside in ‘Jars’), spend safely in shops with their own contactless card, and easily track what they’re spending through handy parental controls and notifications. Children can also deposit and withdraw money at their local post office. When you sign up, you get a three-month free trial! – it costs only €2 per child per month thereafter. Download the An Post Money app on the App Store or on Google Play to get started.
Teaching kids about finances is a journey that begins at an early age and continues throughout their lives. By providing a road map that includes essential lessons like budgeting, saving, and distinguishing needs from wants, we equip our children with the tools they need to make informed financial choices.
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To find out more about An Post Money Mate click here