Teaching Finances to Your Children Rudsworth June 4, 2021 Home & Garden It’s our job, as parents, to make a conscious effort to help teach the obscure lessons to our children. Starting at an early age will impart valuable life skills and build successful habits for their future. This includes all things related to financial literacy and how to successfully manage your own personal finances.Not enough emphasis is placed on learning about personal finance at school. Schools are often theoretical in nature and come much later in a child’s development, making it harder to build long-lasting habits.Following are three practical tips to get your child started earlier and help teach them how to better manage and save their money: Monetary Gifts It’s not uncommon for children to receive money for special occasions, such as their birthdays. Instead of immediately using it to buy a new game or accessories, take this as a teachable moment for your child and speak to them about saving 60% or more of what they receive.This will not only help build up their savings, but it will also mimic the classic rule of saving money earned from every paycheque, (paying yourself first), teaching them the importance of putting something away for the future. Investment Savings There are many valuable lessons one can learn in personal finance. One that comes to mind immediately is how to make their money work for them. Instead of having your child’s savings sit in a low interest savings account, teach them about the benefits of investing.Explain what stocks, bonds and other investment vehicles do and how they can be used to grow wealth. You may want to include someone more knowledgeable in financial planning to assist in this matter. Keep it simple – Start with a GIC to create a relatively safe, long-term return and then move into more advanced concepts like dividends and TFSAs as they grow older. By tackling these concepts early on, you’ll make investing seem less daunting and set your child up for financial success. Allowance and Budgeting There are creative ways to teach children how to properly budget their money early. By utilizing accountability and shared purchasing you can get that message across. Giving your child more fiscal responsibility around the house, putting them in charge of lunch money is a good starting point. ItemizeTell them how much you’ll give them each month and help them come up with an itemized budget, taking into account prices and how much they’ll need for each meal and snack. This will get them excited about getting their favourite foods, and a valuable lesson in aligning what they want with how much they have to spend. Leave a Reply Cancel ReplyYour email address will not be published.CommentName* Email* Website Save my name, email, and website in this browser for the next time I comment.