As we approach the year's midpoint, it's an opportune moment to reflect on the year's progress thus far and consider how your children are advancing on their life paths.
There's no better time than the present to establish mid-year resolutions to cultivate positive changes. Amidst our resolutions and aspirations, let's not forget a crucial aspect: providing our children with financial literacy.
During our lifetime, most of us see more than £1m go through our account – sometimes a lot more. Yet nobody teaches us how to manage that, we don't have formal, compulsory financial education.
That means it's up to parents, not schools, to teach children how to manage their money well, regardless of their own experiences or success with money.
Money is often an afterthought, but integrating financial education into our children's lives is an investment in their future success, and guess what? It doesn't have to be boring. Here are some exciting ways to weave financial wisdom into your goals and your child's journey this year!
The key to instilling good money habits is leading by example. Children learn best through observation and imitation.
Demonstrating responsible financial practices and discussing your goal-setting process can have a significant impact on their attitudes toward money.
So here goes: -
Build a foundation of financial understanding: Adventures in Goal Setting.
"Train up a child in the way he should go, and when he is old, he will not depart from it."
Introduce your children to financial concepts through relatable, everyday experiences.
Start by involving them in simple money conversations during shopping trips and by giving them an allowance.
This practical involvement will lay the foundation for understanding the value of money and teach them its uses and limits. You will naturally sharpen their financial acumen as you model responsible spending and openly discuss budgeting decisions.
Take it a step further:
Set savings goals together, such as for a special toy or family outing.
Create a visual savings goal chart or, better yet, a savings jar for that dream toy or trip. Let them decorate it however they like - stickers, paint, glitter galore!
Then, set achievable goals together. For example, saving a certain amount of their pocket money each week.
Remember to celebrate milestones along the way - small victories deserve big high-fives!
This will build patience and lay the foundation for wise decisions.
When providing them with pocket money or an allowance, utilize it as an opportunity to underscore the significance of responsibility.
Linking their goals to their pocket money will create a correlation between good money management and foster a sense of responsibility and resourcefulness.
Pocket money is the best way to get children in the right habits when it comes to managing money.
Earning Through Learning
Understanding that money isn't just handed out freely is a crucial lesson for everyone.
By associating pocket money with completing chores such as tidying up or taking out the bins, you can effectively impart the value of hard work to your children and illustrate how it directly impacts what we earn. It took just one instance of receiving less money due to skipped tasks for our children to grasp this concept!
Tying pocket money to responsibilities teaches them that the money they receive results from their efforts, instilling a sense of ownership and entitlement. This sense of achievement is far more rewarding than simply receiving handouts.
Even when the weather is unpleasant and the tasks seem daunting, my children stand proudly after completing them. They understand that they've earned their money and have the freedom to spend it as they wish.
Turn education into engaging activities: Money Talks.
Have you ever noticed children soak up information like sponges when it's fun?
Engage your children in fun, interactive money games.
Turn money lessons into playtime! Start with the basics - introduce coins and notes, explain their values, and play "shop" at home. Give them fake money to "buy" toys or snacks. It's hands-on learning at its best. As they get older, take the game up a notch by involving them in real-life shopping trips. Give them a budget and let them make choices - it's a crash course in decision-making and budgeting.
Gamify it: - Give your child a small amount of money and challenge them to find a way to double it or make it grow over time. This could include investing a portion, starting a mini-business, or finding creative ways to save.
Remember to reward positive behaviour and successes.
Create a family catchphrase for each time they win the challenge.
Well done, good, and faithful child. You have been faithful with a little; I will reward you with more". Then, raise the stakes by giving them more significant amounts and complex challenges.
Cultivate generosity and empathy: Cheerful Giving.
Acts of charity and kindness are very valuable, so encourage your child to set aside money for donations or to help those in need. Have them write down all the charitable activities they want to do this year and how they will fund them. This will build compassion and a sense of community.
Distinguishing Between Needs and Wants
It is crucial to teach children the value of money and its limitations. One effective method is to differentiate between their needs and wants.
Needs encompass essentials such as school trips, uniforms, and necessary family holidays. On the other hand, 'wants' encompass everything else – like when your daughter repeatedly asks for glue to make slime or your son inquires about a new Xbox game for the umpteenth time.
This approach doesn't imply refraining from occasional treats for your children; as a parent, that's entirely your choice. Instead, it aims to empower them by limiting their spending and fostering the development of their money management skills.
And here's a secret weapon:
MoneyMatiX Youth Money Camps! Based on the virtues of discipline, prudence, and generosity, these camps turn money lessons into unforgettable experiences.
Teaching children about money isn't just about pounds and pennies; it's about instilling lifelong financial confidence.
This year we are hosting a series of these which kick off in Glasgow in early July. Check out the dates on the website. For less than £50 a day, for 3-days we will take your child on an important journey of discovery and confidence building – and we will feed them on the way.
Consider enrolling your children in a MoneyMatiX Youth Money Camp in 2024, if one is available nearby. It's an excellent opportunity to enhance their financial literacy. Additionally, it provides a worthwhile activity for them during the summer holiday, with a long-term impact on their lives and careers.
Ultimately, young people need good role models, and these camps will give them a foundation for making sound money decisions, using entrepreneurship as a practical learning ground.
At the same time, they will have access to great role models and mentors who can reinforce and complement the lessons you teach them at home. Your enthusiasm and the learning opportunities you provide will undoubtedly rub off on them! And give them the skills to succeed in the long term.
So, here's to raising money-savvy, goal-oriented, financially confident kids.
Here are some useful resources I have found invaluable
The Money Advice Service provides comprehensive guides you might want to read. This is an interesting article and in-depth report about how families teach their children about money. It is a fascinating and insightful read. This report is particularly insightful and useful for understanding how families teach children about money - many lessons and takeaways. You can read it HERE
The UK Government Education Department website has a lot of valuable information, governmental guidelines, and programs about financial education for young people. Education is key, and the more your child understands, the better their life chances.
The Financial Conduct Authority (FCA) is responsible for the functioning of the UK financial markets. They aim to ensure honest and fair markets by protecting consumers, protecting the financial markets, and promoting competition. The FCA is a public body under the purview of the U.K.'s Treasury and Parliament. The consumer advice section includes information about financial education and protection, especially relevant in the context of young learners. The section on their website about ‘consumer duty’ - the new consumer laws to help protect you - is particularly useful. You can link to it HERE
BBC Bitesize is a fabulous website that covers basic economics or financial literacy, and it provides engaging educational content suitable for children.
The Children’s University of Manchester offers interactive learning tools about money and much more. Games and quizzes are a great way to introduce young ones to financial concepts.
Final thought.
Why not commit to equipping your children with essential financial skills this summer? Encourage their active participation in financial decisions, provide interactive learning experiences, and enrol them in the MoneyMatiX Youth Money Camp.
Our first two money camps take place this Summer in Glasgow and Edinburgh - to register your child, CLICK HERE
Let's work together to shape a generation prepared for financial success.
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