| Although the piggy bank is the first thing that | | | | Next time your kids ask you for something that's |
| springs to mind when we think about teaching | | | | beyond the budget, explain that buying it is not an |
| kids money management skills, the reality is that | | | | option today and that they need to work out |
| these days, the money box should just be the | | | | how they could go about being able to earn the |
| first step in the process. | | | | cash to buy it. Giving them the chance to work |
| Teaching kids how to budget | | | | out that you can't always have everything you |
| One of the easiest and fastest ways to teach | | | | want straight away is an important step in |
| your kids the basics of budgeting is to set up the | | | | creating good money management habits, and if |
| 'three jar' system. When they get their pocket | | | | you back it up with helping them to figure out |
| money it gets divided up into three jars - one is | | | | how to earn the money and save until they reach |
| for spending, one is for giving away to charity and | | | | their goal, you'll be giving them strategies that will |
| one is for saving. Basically, you're setting them up | | | | last a lifetime. |
| with a mini version of your budgeting system. | | | | Teaching kids by being a good role model |
| They get to decide how much to dedicate to | | | | We learn the vast majority of our money |
| each jar and you need to give them the chance | | | | management habits from our parents. Have a |
| to do some extra jobs to earn some additional | | | | think about what your kids are learning from you |
| 'savings' income. | | | | on a daily basis. Are they seeing you behave |
| Teaching kids to set goals | | | | impulsively or responsibly? Are they watching you |
| A great way to start teaching kids about setting | | | | work toward your own goals or seeing you |
| goals is to have them save up for something | | | | simply put everything on credit? Are you showing |
| they want to buy. Whether it's a PSP, a new bike, | | | | them how to be socially responsible by donating |
| a computer, an iPod or a new toy, get them to | | | | to charitable organisations or doing volunteer work |
| set a goal and start saving toward it. If you want | | | | if your budget won't stretch to cover donations? |
| to help them along the way, set up a 'dollar for | | | | Are your kids aware of the family's financial |
| dollar' system, where you'll match what they | | | | situation or do they think that an endless supply |
| save, but let them do the hard work and take | | | | of money just pops out of the ATM whenever |
| responsibility for getting enough cash together to | | | | you need it? |
| reach their goal. This technique instills a great | | | | People often say that their kids are too young to |
| sense of pride in a kid and also helps to stop | | | | learn about money management, but the truth is |
| some of the nagging that instantly buying them | | | | that if they can count they're old enough to start |
| whatever they want can encourage. | | | | being taught the basics. If you wait until they're |
| Teaching kids to be self-reliant | | | | ready to leave home to start teaching them the |
| The second part of teaching your kids to achieve | | | | importance of good money management then |
| goals is to stop telling them that they can't have | | | | chances are it'll be too late and they'll end up |
| stuff because 'we can't afford it'. This mindset will | | | | having to learn their financial lessons the hard way. |
| teach kids to simply give up or put things on | | | | Give them the best start in life by teaching them |
| credit, rather than teaching them the importance | | | | simple lessons the easy way, right from the start. |
| of working out how they can afford something. | | | | |