How Can I Teach My Child About Money?

Having some knowledge about finances can help a child to grow up understanding if something is cheap or expensive. In addition to this, they may be likely to be smarter with the money they do have if they appreciate the work that led to gaining a salary, or how long it needs to last them. In the modern day, teaching a child about both cash and card payments, as well as how to maximize any money that they already have, can help to better equip them for adult life.

Savings

Saving money, rather than spending everything you are given each month, can help to put you in a better position should you come across an unexpected expense. While, in the early years, you may be the one paying for anything that your child needs, there will come a time where they might need to assume their own financial responsibility. 

Starting a savings account, such as those found at Wealthify.com, when your child is small, can assist in giving them a bit of a helping hand towards independence. By sharing the information of the account with them, such as the balance and interest rate, you may be able to use this as a learning opportunity, as well as an exciting nest egg for the future. Explaining to them about your own savings, omitting amounts if you so choose, and what that money is there for may also help to give them some real-world experience regarding saving.

Budgeting

Another aspect that you use every day, and probably take for granted by this point, is the ability to make your wages last until you next get paid. This can include budgeting for groceries, clothing, and even more expensive purchases. You may need to figure out how much sales tax will be added to certain items, which may mean that you have ultimately spent more than your budget allows. Teaching your child caution with money, as well as how to work out what an item will be with sales tax added on top, could help them to not take everything they see at face value, as well as to understand why it is important to prioritize essential purchases, and ignore impulsive spending.

Tipping

While gratuities are voluntary, it can be deemed as poor taste to not leave a waitress or server a tip following a meal or service, especially when you factor in how low their basic wages can be. Leaving a tip can be a great opportunity for you to teach your child about money, as well as how to calculate percentages. Even younger children could be walked through the basics of an amount, as well as taught to show respect to everyone they encounter. 

Considering the importance of money in getting by in the world, it is no surprise that this may be something a parent should consider teaching, even when their child is young. A bit of knowledge with money can help them to understand the cost of living, and even make sensible investment choices in the future.