As leading independent financial advisors in Lancaster, we often hear from our clients that they wish they’d been taught more about financial responsibility when they were younger; many believing that they wouldn’t have needed to seek financial help if they had been aware of how to manage their finances as a child.
Although this isn’t always the case, it’s always a good idea to teach your children the importance of money and how they can make the most of the money that they have from an early age. Many children still get pocket money, so there’s no better time than the present to bring them into the world of financial responsibility.
Need some help? Here are three ways to help your children become aware of their finances and begin their financial journey.
Pay Them For Their Help
Many parents love getting their children involved in the day to day running of a household, which includes doing some of the jobs that the adults would normally take care of, such as the laundry or washing up.
This is a great opportunity to teach your children that hard work is rewarded with pay, just like in a business environment. Strike up a deal with your children that if they complete their chores that you have set them adequately, you will pay them with money that they can use for whatever they want.
This introduces them to the concept of working for pay, as well as easing them into the decision to spend or save their money. Highlight the pros and cons of both saving and spending their hard earned money and let them make an informed decision.
Let Them Make Mistakes
Just like any other learning process, we all learn from our mistakes. It is important to let children make financial mistakes when they are younger so that they can learn what will happen and aim to avoid making them again in the future, when the consequences could be much more severe.
For example, If they want to spend all their savings on one item, let them, but don’t offer them any financial help when they ask for further money to buy something else straight after. They need to learn to budget and how to determine what their money should or could be spent on.
Involve Them In Family Financial Plans
We’re not saying leave all your family’s finances in the hands of your child, but why not involve them in your financial planning?
Give them small tasks to do, such as budget for the weekly food shop under your watchful eye, giving them help if and when they require it.
This will show them the worth of the money that comes into the house, as well as encourage their budgeting skills at the same time. The sooner a child becomes aware of how important money is, the easier they will find it in later life to budget their own lives and reduce the risk of running themselves into crippling debt.
It’s also important not to hide the utility bills from them. In fact, let your child look through them with you so that they understand how bills work. Many people don’t realise how much bills can cost, so set them up for a future where they expect bills and can budget for them adequately.
Financial responsibility is something that all children should be taught to have, especially if they have access to their own funds such as pocket money.
Do you require advice regarding your finances, but don’t know where to turn? Burton and Fisher are here to help. Our dedicated team of expert financial advisers are on hand to help you with any financial issues you may be having, so don’t hesitate to contact us today, online or by calling 01524 416872. You can also keep up to date with all our news over on our Facebook, Twitter and LinkedIn pages.