How do we teach our children about money?

Kids learn about money in two different ways: though their own experience and from watching their parents. Set your children up for financial success by grounding them in positive experiences and by being the good model they need. The best thing you can do is lead by example.

Here are some of thoughts on how to teach them about money:

Start young. By the age of three, most kids start to become curious about money and how it works. This makes it an ideal time to model good spending habits. Get kids to open bank accounts as early as possible so they can watch and track the value of their money.

Teach through allowance. Provide an allowance so that they can have an income of their own in order to learn their own real-life money management lessons. Encourage them to save and spend. Factor in an incentive programme to save with their allowance.

Get them thinking about budgets. As they get older, kids become full-fledged consumers and are ready to start learning how to make good spending choices. If you think your child is ready, put budget constraints on their choices. Help them to understand compromise and limited spending. Teach them to look for deals. Let them make mistakes on their own.

Get them investing early. It’s never too early to invest. In fact, the sooner, the better. Buy them a product like SATRIX and explain to them how it works that they might understand. Let them track these investments and get them into habits early.

Help them understand the consequences of debt. Our society today is a society that has abused debts. It is so easy to borrow to spend these days and this concept of immediate gratification and delayed consequence is a dangerous one. As they get older make sure they understand how to avoid and manage debt effectively. Remember, you have to practice what you preach to be effective at this lesson.

Teaching your child the value of money will not happen overnight. It takes many small steps. Remember that they will probably mess up along the way, but mistakes are how they learn.