How to help your children learn about money

The story of Pinocchio may be more profound than we initially thought…
A perfect creation gradually gets influenced and tarnished by its surroundings before thankfully finding its way back to its true nature.

Up until the ages of 7 or 8 children are literally being programmed by their environment, what they see, touch, hear and most importantly feel, shapes the 'rules' they create in their subconscious minds. These rules then dictate their values, beliefs and actions and can be difficult to reshape as adults.

With financial education absent from the curriculum in most schools, it’s important for parents to play a key role in teaching their children about money.

When it comes to finances, think of the rules that we ourselves created during these impressionable years. Was it scarcity and lack, was it jealousy and envy, or was it a confidence and certainty?

Here are 7 ways to help you teach your child about money

1. Set an example

Think about the example you are setting your children. Do you change the subject when they walk in the room? Do you argue and fight over money or display stress over late bills? Children are more influenced by what you do than what you say.
Try and cultivate a more open approach to discussing money. If planning a trip or holiday for example, why not share the costs of different options and involve the kids in the decision process?

2. Reward them for saving

In the 'real world' we are rewarded for saving or investing either by interest, dividends, rent etc. Encourage your child to save by topping up their savings with interest of your own.
Adding a simple interest, or by giving 1 coin when they have saved 9 is an easy way to begin.

3. Encourage routines

Think of habits such as brushing your teeth or buckling up in the car. It becomes so automatic that we don’t have to think about it. Yet as a child it was sometimes an effort or something that we needed to be encouraged to do.
What if every time your child received some money they divided into 3 and allocated to spend, share and save. The chances are that if repeated often enough, this habit may also become automatic.

4. Use real money as play money

If your child wants some coins to play with, do you worry that they will lose them, or that coins are dirty and full of germs? What are the subconscious messages here? How are children ever going to be happy and comfortable with cash if they think it’s either dirty or so scarce that they fear ever spending it?

5. Demonstrate paying bills
This can be a great way of explaining the consequences in a cash free society. When the credit card bills come in, sit down with your child and look at each of the items. Then you can explain what each purchase relates to. Then when you write a cheque it’s another chance to explain the system and that money is not just notes and coins.

6. A field trip

A trip to the bank, post office or supermarket can be a rich learning experience. Explain what you are doing and why. Focus on where the money goes and how it circulates in the economy.

Encourage numeracy skills by asking your child to hand over the money and calculate the change.

7. A Gratitude List

One of the best ways to manifest more of something is to be grateful for what you already have.

Encourage your kids to make a list of the things they are most grateful for. Perhaps tie this in with the spend share save activity and donate some money to something important to the child.

If they have lots of toys why not give some to a hospital or charity shop?

In summary, remember that money is an idea as much as anything. So create an atmosphere where it’s ok to discuss money and for them to explore and learn.