Unlock the secret to teaching your children about money

Do you feel uncertain when it comes to teaching your children about money? You may be wishing for a way to help them understand how to make wise financial choices but don’t know where to begin.

You’re not alone – in today’s modern economy, knowledge of personal finance is essential as they start their lives and careers. But fear not - there are certain methods and strategies you can implement that will provide invaluable skills in managing money throughout each stage of your child’s life cycles. In this article, I will examine the importance of learning basic money management guidelines early on and offer insightful ideas on how to impart simple lessons with great impact in order for you to unlock the key to teaching your children about finances!

When we talk about children and finance, exactly what do we mean?

I was raised in the Windrush generation, where money was not spoken about within my household. Certainly not to children. So how do we learn about money?

How do we learn how to respect and value money as children, let alone adults?

Not sure what school, college or university you went to, but where I went, you learnt nothing like that. You did your basic subjects, you left school and see ya.

I was never spoken to about money. How to spend, how to save, how to invest and how to give back. All I did was spend until debt started to mount up, so what do you do? Spend some more.

Some of us, as adults, were never taught anything about money, so spending became a habit. In the society and environment that we are in now, what the children are seeing is tap tap tap with our cards. Children are not understanding we have to WORK to EARN that money which then goes into a bank account in which we can now tap tap tap. To empower the next generation with more financial literacy than past generations, it’s essential to make a shift in how we think and behave when regarding money. Let me explain...

If a child sees you spending (even though you could still be saving secretly), the child will grow up thinking if they want something, they just tap tap tap. If money is a taboo conversation in your household, chances are your child will not have the full concept of how money works. Another thing I often see and, sure enough, have experienced it myself is emotional spending. When you are sad and want to cheer yourself up, down to the off-license you go, or here comes a new dress or suit because you think you deserve it, a relationship breakup, so now it’s out every weekend. These are emotional triggers to money as you don’t want to feel sad anymore, so you cheer yourself up by doing things to make yourself feel better.

Unfortunately, this is not what we want to be teaching our children. We are role models for our children. They are looking and watching all the time. Even when we think they are not watching, they are watching and listening.

Changing mindsets

So how can we change our mindsets to help prepare our children and get them on the right pathway? We first must change the way we think about money. We don’t buy everything we want. Buy things we need. Wants can come later. Have a plan, set goals, and have a vision board of where you see yourself in x number of years. Start writing down these goals and review them regularly. Open different accounts and spread your money around so you know you have a budget for personal spending. Read financial books to get you in the right mindset about money. Stick to the plan/ goals as best you can. If you fall off the wagon, it’s o.k. We all do. Just as long as you jump straight back on, you will be o.k.

Now once you have these things in place, educate your child about money. Be transparent with your child so they learn to trust you. If you have lots of £000000 at the end of the number in your savings account, explain to them it’s not the latest trainers’ money; it’s your future, maybe a deposit for a house or some kind of emergency funds for when they are old enough. If you show them your account and it’s £-000000 in the red, in the overdraft, let them know we don’t have money for trainers right now but home in on their skillset. What are their interests/hobbies? Not just the child’s, yours too. How can you make additional legal income? What are your strengths? What do people need that you can offer them that they are willing to buy? There are apps now for children (Go Henry is a good one) where they can spend money, save money, invest money and even pay taxes! So you put some money into their account, and they are fully responsible, but you can also see their decisions. This is a good tool to then open conversations.

It’s important that we encourage our children to pursue their passions and find pathways to success. While traditional education may not be for everyone, finding alternative solutions can lead to a life of fulfilment - both personally and financially. As parents, we must be proactive in teaching our children the importance of money and equip them with tools that will set them up for financial success. By encouraging their entrepreneurial mindset, we can open new doors to an unknown future; one where they are empowered by knowledge and equipped for any path life brings their way. Let’s work together to ensure a brighter tomorrow is within reach! ■

Sandra Trew Parental Coach Director & Founder www.getrealparentalcoaching.com