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How To Raise Your Kids Money Smart

Do you ever look at your kids and wonder what sort of state the world will be in when they grow up? Do you ever wonder what their job prospects will be like, whether the property prices will be prohibitive or whether they’ll be able to achieve financial independence without having to spend the best years of their lives with their prospects hampered by the yoke of debt?

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These are all common concerns for any parent worth their salt and while we may not be able to exert any control over the economically uncertain times in which our kids grow up, we can teach them the value of financial awareness so that they can make the most of the economic climate for better or for worse.

The sad but inescapable truth is that as parents there’s only so much we can do. Our job isn’t to do all the heavy lifting for them,(in fact this would be doing them a real disservice), rather we must teach them the lessons that will build the infrastructure on which they build their own sense of financial awareness to fend for themselves. You don’t have to undertake an online MBA accounting degree to raise your kids to be financially literate (although it certainly helps). There are some easy and (dare we even say fun), ways in which you can teach your children the value of money and responsibility from a surprisingly young age without even having to get the Monopoly board out.

Get them used to seeing real money

In the Apple pay / contact less era, we spend money with a swipe of a card or our phone. While this is convenient, it’s not terribly useful for our kids. If they see money as a concept so abstract that it doesn’t have a place in the physical world then how can they assign value to it? Instead get them used to handling (and watching you handle) real money so that they can understand its inherent value. Plus, unlike the great reserves of credit and debit cards, there’s no recourse when paying with cash. You either have enough, or you don’t and that’s a crucial lesson for kids to learn.

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Make saving fun

Many parents give their kids some sort of allowance, but introducing the concept of savings to a 7 year old can be a really tricky sell. After all, in their eyes the prospect of anyone wanting to put their money aside when they can spend it immediately on toys or candy must be bamboozling. You can  help by incentivizing them to save by matching their contributions so that they can save up for something they really want rather than wasting their money on a payday splurge. 

 

Teach them the value of budgeting

Establishing (and sticking to) a household budget is one of the most effective and important things a family can do in managing their finances. Modelling this behavior, and being open and honest with the kids about where all the household income goes and why it can’t all be spent on ‘fun stuff’ will not only teach them the importance of budgeting but help them appreciate that the reason they can’t have what they want all the time isn’t because you’re pursuing a personal crusade against their happiness.

 

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