It’s a myth that it takes money to make money, says Gavin Fourie, editor of Unconventional Millionaire
“People think that those with wealth were born into wealthy families. Yes, there are some rich people like that. But many millionaires actually started with nothing. Instead of inheriting the money
from parents, they accumulated it themselves, slowly and surely over a number of years,” Fourie explains.
That’s why good money management
– not money
– is one of the most valuable skills you can pass on to your children.
And showing your children the basic steps such as how to budget their pocket money
and shop around for the best price, will establish good money
habits for life, says The Australian Securities and Investment Commission’s MoneySmart
Want to get started? Good Housekeeping
offers these three easy, practical ways to teach your children to be money smart.
Three practical lessons to help you raise money-smart children
1. Make them work hard for the money
One of the most important lessons you can teach your children about money
is that you have to work for it, says Good Housekeeping. Pay your children pocket money
for doing chores and help older children find a part-time job. Children think twice about spending their money
when they know how hard they’ve worked for it.
2. Explain budgeting to your children
Budgeting starts by setting a goal and then coming up with a plan to achieve that goal. A good idea is to give your child two jars or envelopes – one for spending and one for saving. “When you give them their pocket money every month, they should put at least a quarter into the savings jar or envelope and the rest into the spending one. This way, your children can keep track of their spending as well as how far they are from reaching [the goal they’re saving for],” Good Housekeeping’s article explains.
3. Teach children the value of rainy day savings
If your children come to you for extra money
when all their pocket money’s been spent, don’t give in! Explain to them how this situation could have been avoided if they’d planned better. Encourage your children to put loose change in a piggy bank or their savings jar for rainy-day situations like these.
Put these three tips into practice with your children today and we’ll soon have a nation of money-smart adults, eager to pass their money management skills
onto the next generation!