What financial lessons should we be teaching our kids and from when?

There are many things that our kids should expect from us, and even these can be a challenge for some, particularly in countries not as well off as our own.    Fundamentals like feeling safe and protected, support, love, a roof over their head, health care and nutritious food.

Beyond that, like most things in life, many of the pleasures we enjoy, big or small, come at a cost.

Teaching these lessons of value, effort and reward really should be started early in a child’s life.  How and what you do really starts from the values the family embraces as a family unit and will also very much depend on the age of the child.

There are certain “tasks” that simply contribute to the family effort and that don’t necessarily lead to a reward.  This might be as simple as a child taking their plate to the kitchen from the dinner table once they’ve finished their dinner.  Each family will have their own playbook.

In the early years (up to 5), the whole concept of money is foreign and the fact that its supply is not endless is an important early lesson.  For those that have the financial capacity, it very easy to spoil your children out of love, but it can have unwanted long term consequences.  The lesson for a pre-schooler that you have to wait sometimes to get what you want is a simple but important lesson.

This might be as simple as saying, there is $5 to spend and you then help them to decide what they can fit in to their little budget and what they may have to wait until next time to have.

For infants and primary school age children, it very much about the concept of saving and choices.

As adults, we understand the need to save for special events or things we want, whether it’s tangible like a new car or maybe a family holiday.  On a much smaller scale, this lesson is an important one for children.

It’s all about choices.  Knowing that they can have that those two food treats now or perhaps, just have the one and save the rest for a toy they’ve had their eye on.  I think the trick here at this age is not to make it too long term, even short term saving is a great place to start.

Particularly for the older teenage children, where you have the capacity, there’s nothing wrong with supercharging their savings plan by perhaps matching their savings or making some other contribution once they’ve hit a certain savings goal.

Then there’s old but important lesson of reward for effort and for most kids this means pocket money or one off rewards for specific jobs.

It really is a great way of teaching the lesson that we as adults face every day; if you want something, you usually have to work hard to get it.  This work ethic will stand them in good stead in a lot of ways as they start life in the workforce.

How much pocket money you can or want to give and what jobs they need to complete to get it really is a family’s own choice.  Talk to other parents in your children’s school to get a few ideas.

I think the main thing is get the balance right between making the chores just hard enough so there is a sense of “I deserve a reward” when they’re done with the child feeling as though they have achieved something, yet not making them too onerous that disenchantment sets in.

And by the way, I also don’t think there’s anything wrong where you have the capacity to provide the odd one off unexpected reward, particularly where something is being achieved in a more general sense.  This might be for helping out on a charity day, assisting a friend with their problems, generally good or improved behaviour or improved school results.  Whatever it is, there is a time and a place for one off pieces of generosity and demonstrations of love where the circumstances allow and the reward is deserved.

Developing your children’s attitudes and habits to money is a crucial lesson for the challenges that they will face later down the track and it’s never too early to start.

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