So when should we start budgeting and saving? Is it when we get our first part time job when we are at school? Is it once we've graduated and we are in our first paid salary job? Is it when we start a family? The answer is probably none of the above. Maybe we should have started when we were a kid. This is where we can teach our kids to learn the importance and value of money. When a child learns “I want….I need…”perhaps this is the time to encourage pocket money and the significance of budgeting.
Teaching our children the importance of saving and budgeting from an early age could benefit not only them but ourselves too. If we teach our children and set them small challenges it will encourage them and keep them motivated to save money. Children have goals too, on a different scale to ours and could be for less expensive items such as a new toy but reaching those goals could be important and give them a sense of achievement to do it again. Understanding the importance and value of money should be introduced at a younger age.
So involving our children in the family finances encouraging them with the food shopping and getting them to compete with each other to find the cheapest item can help them understand the value. Converting money into days or hours spent working can help a child comprehend how long it takes to pay for things. Move the child’s thinking away from ‘money grows on trees’ or ‘magically comes from the ATM’ and start educating them.
Resisting Impulse purchases is very hard for a kid to understand – hence why supermarkets put their lollies at the checkouts at eye level for children. Teaching your child that if he saves for the lollies maybe next time he/she can have them. Children will eventually understand the worth of money and how much out of the piggy bank we have to take in order to pay for the lollies.
Big kids encounter the same urge of impulse buying too, just on a larger scale. Gen Y’s are now more interested in flash cars and swanky bars. With house prices increasing, jobs becoming more competitive to get, buying homes just seems unrealistic and far beyond the budget. This is resulting in Gen Y’s living at home for longer. We open up bank accounts and start saving for our children from when they are born so why not encourage and educate our youth to start adding to the savings pot.
Prepare the child for the path, not the path for the child (Brad McCoy).