Millennials and Generation Y are entering a tough market; housing prices are up as well as the unemployment rate. University is more expensive. Everything costs. The lesson stings less, though, if you start learning early. From accountant to parent, use our tips to help your child get money-smart.
The piggy bank
Old school but effective. You don’t need a traditional one, a simple jar will do, but it’s certainly more fun. If you want to hammer home the true value of money, read this viral Humans of New York post. The father of the family set up four jars for his sons to use as piggy banks: spend, save, donate, and invest. This helped the children understand the true value that money could bring, and how fortunate they were to earn it. Their dad might not be an accountant, but we certainly approve of his tactics!
Open a savings account
This is something you can make contributions to as a parent. When they’re old enough, use the money to pay for an important school trip, the formal, or as a contribution to their first car. When you get statements, sit down with your child and show them how the account grows as you put the money in.
Teach them about budgeting
We’ve all experienced that situation where your son or daughter sees something at the supermarket and puts it in the trolley. But you’ve had to take it out. The process repeats, probably until they throw a tantrum. Calmly explain that you only have a certain amount of money to spend.
Explain what happens when budgets fail
‘If you spend money on X, you won’t be able to afford Y.’ This is useful when your child wants to buy something with their pocket money.
Make a budget/earnings chart, with items your child wants. Write the price alongside it and calculate how long it will take to save up the money. That brings us to the next point.
To learn the value of money, it’s better for children to earn it. Once they’re old enough to do jobs around the house, pay them their ‘salary’ and let them choose where to put it: spend, save, donate, or invest.
Read, learn, repeat