Top 10 healthy money habits to teach your children

24 September 2019

It used to be that a few games of Monopoly and a lecture about the importance of putting a little bit aside each month was sufficient to teach your kids about money.

Not so in today’s economic climate. The way of the world has evolved when it comes to earning and saving - just ask a Millennial how likely they think it is that they’ll ever own property. It’s not easy out there.

Surely, then, starting early with some key practical financial advice is the way forward?

Here, RL360 has produced the top 10 ways in which you can teach your children healthy money habits which will stand them in good stead for the rest of their life.

1) Keep your eye on it:

This is one for the smaller children. Little ones love to save things, whether it’s money or Lego bricks – but what’s the point in saving anything if you can’t see your stockpile grow? Using a clear jar instead of an opaque piggy bank provides a visual incentive to keep going and creates a feeling of real achievement.

2) Control your impulses:

The odd impulse buy is good for the soul but haemorrhaging money on complete tat at the drop of a hat is not. And it’s certainly not good for the bank balance. It’s about self-control and setting a good example for the next generation. Behaviour is learned and how do you expect your child to respect their money when you’re frittering your own away with little or no thought?

3) The value of hard work:

As your mother’s old saying goes ‘Money doesn’t grow on trees’. So, show them this is the case. If you have a job you’re already leading by example. Also, instead of simply tossing a note their way as they rush out of the house, make them earn the money in advance and save it for later. Chores are a great for this, and it also means less for you to do, so it’s a win/win.

4) Hold them to account:

As soon as they’re old enough, open them a Post Office or a Bank Account. Don’t just deal with all the admin yourself, however, make sure they are involved in the process from start to finish. If they’re a bit older, make them responsible for their own bank card. Above all, explain the consequences of the term ‘overdrawn’!

5) Save with purpose:

Saving for little treats here and there is great but why not ask your kids to take responsibility for some of the bigger things in life? Thinking ahead is a vital part of money management and every young person has some big milestones coming up for which it would benefit them to prepare. What do they want to save for? A car? University? A house deposit? They’ll understand the satisfaction of having made a contribution.

6) Create a budget:

The importance of creating and sticking to a budget cannot be overestimated. And this is an easy one to introduce at an early age. There are always things a little person wants from the toyshop, but can they afford it? Regular pocket money is the easy solution here. The difficult part is sticking to your guns when the wheedling begins. Don’t cave, they can wait another week.

7) Invest in the future:

One for the older kids. It’s likely to be a hard sell, given you’re dealing with people who find picking their own clothes up off the floor exhausting, but they’ll thank you in the long run. Take their saving a step further and suggest they look into investments. It’s worthwhile learning about the stock market and how to make it work for you. When they realise it’s possible to make their money grow, they’ll listen.

8) Avoid the plastic:

Time to get hypocritical. There are very few of us who haven’t used a credit card at some time in our lives. Luckily, most of us know that we’re not spending ‘free money’ and manage to settle our bills regularly. The message here is to use credit cards or borrow money sparingly. The delayed gratification involved in saving for and then paying for something outright is a much better feeling than that sinking in the pit of your stomach when your borrowing snowballs.

9) Don’t worry, be happy:

Social media is blamed for pretty much everything these days. Where it used to be rappers, flaunting their gold jewellery and cars, now its online influencers sporting top brand clothes and accessories. It’s an image not wholly based in reality and it’s worth teaching your kids this. Aspirations are great but they shouldn’t get in the way of enjoying what you already have.

10) Just giving:

Show your kids that money isn’t a just one way street. Receiving money is undeniably great but giving can be massively satisfying too. Money does make the world go around but it only works if those who have some of it share it with those who don’t. Giving to charity is a good way of reinforcing the value of those notes and coins your child has accumulated.