5 Things I Want to Teach My Children About Money

Money doesn't grow on trees 

At the age Ethan is now, there's absolutely no way that I would expect him to understand where money comes from or how it works. To him, at the moment, money pretty much does grow on trees, as he doesn't even understand what the word money is. But there will come a time when Ethan (and his soon to be little brother) will understand the concept of money and will realise what the things that look just like fancy pieces of paper that are sometimes slotted inside birthday and Christmas cards are. I want them to understand from the age that that they realise what they are receiving that people have had to work for that money and that receiving money is not just something that they should expect.

Work = Money

I, personally like the idea of children earning pocket money rather than just being given it. I like this idea because it teaches them from an early age that if you want money in life - you have to work for it, it isn't just something you get given. I also like to think that I'll be able to teach them this by explaining why Mummy and Daddy have to go out to work and also why they have to spend time working from home. 

Spend it wisely, as once it' gone - it's gone

I want my children to, when they're old enough to be able to understand, realise just how quickly money can come and go. There will be times when they don't quite have enough for something they want and I'm sure that Adam and I will be happy to put the extra money in for them. But I don't want to do that every time as I feel it won't really encourage saving and/or patience when it comes to purchasing the things that they want. I want them to understand how important it is is to spend money wisely and carefully consider what their money goes on.

Only spend what you can afford

It's a long way off (probably 18+), but I want to teach my children that they should only ever commit to buying things that they can truly afford. For me, this means things like taking loans out for big (sensible) purchases - I personally think that this is okay to do, as long as you've worked out that you can easily afford to pay back the repayments each month without the worry of ever falling short. If there's a concern about this, I want to teach them to be patient and save up their money. 

Put a portion of your money away for a rainy day or for bigger purchases

When I was younger and received money, it was such a big excitement for me that I had such an urge to want to spend it straight away. I usually headed straight for our local shop and spent it all on sweets (as children tend to want to do). I want to try and teach my own children the importance of saving. I know that as excitable children with a little bit of money in their hands, they are not going to want to put it all away, so I will encourage that they put a percentage of it away and explain to them that if they do this, they will have money readily available for bigger purchases. I'll explain to them that by putting money away they can earn interest on it - to teach them about earning interest on their savings, I intend to open up a savings account for them such as a junior-isa at the bank and explain it to them that way. Or even add a little interest to their piggy banks myself for pocket money they have put away. It's also important (more so as they get a little older) that they understand the concept of investment and the financial services that different investment companies have to offer. I think it's quite important that they go on to learn that there is in fact quite a few benefits to putting money away.

 

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