Encouraging your kids to understand that money doesn’t grow on trees can be tricky – how to explain tax, household expenses or even how to start saving can be daunting. Here are some simple tips to help you educate your kids on all things finance!
From an early age, chat openly with your children about money, where it comes from and what it’s spent on. If you can’t afford to buy something, explain this to them. Tell them how often you get paid and briefly what this goes on – the house, shopping, bills, car etc.
Keep chats about money positive, but also be honest about what you can and can’t afford.
If you can afford to, give your kids pocket money then encourage them to use this to buy the things they want. You could even give them pocket money as a reward for doing chores around the house. This helps to encourage positive behaviours around money such as saving and budgeting.
Encourage your kids to open a savings account. Go online with them and compare the best accounts, explaining the differences between them before you choose. Perhaps even tell your kids about your savings, how much you save and why.
Now may be a good time to talk about the differences between debit and credit, what it means to get a debit card and credit card as well as what the pros and cons are.
Share household expenses
As your kids get older, you may want to share your wage slips with them to explain what is taken out of your wage before you get your pay. Then, show them bills to explain what things around the house cost and how you pay for them. This gives your kids a real idea of how much things which they may take for granted, such as water, electricity and gas, cost. Telling them how you budget and prioritise your spending will encourage them to do the same in their lives.
Once your kids are of working age, encourage them to get a part time job. Take them through what their wage would have to cover if they lived alone- you could discuss rent costs as well as council tax and other expenses. You could even go one step further and charge them a small fee for rent.
It’s never easy to discuss money with kids, but keeping an open and positive relationship should help them to understand money and develop positive behaviours for the future.
About the author:
Provident has been putting customers at the heart of its business since 1880. It provides small loans to customers who would otherwise have been turned down for credit from more mainstream lenders.
Provident offers a face to face service through its local Agents, who take customers through their application, including an affordability assessment and ultimately decide whether you are eligible for the loan.
If the customer is accepted for the loan, the Agent will then deliver the money and collect repayments.
Representative 399.7% APR.