Ways to teach your children financial responsibility and money management

Financial management may or may not be taught in your child’s school, so teaching financial responsibility at home is worthwhile. It’s important to teach about money management so that children start to learn how to handle money responsibly, and so that they don’t form bad spending habits. Here are some different ways you can teach your children about money management:

Set a good example

Children learn a lot about how to handle money by watching their parents. Set an example by modeling good spending habits and being honest with your children. A great way to set a good example is to involve your child in financial planning. Let them see you making your budget, paying bills, and planning major expenses. Explain your decision making and affordable choices, and allow them to participate in the family’s decision making.

Give an allowance

You can give an allowance to your child for doing chores or other duties. By giving an allowance by way of earning it, your child has real money to work with and they learn the value of it. This will also help show them the implications of money – once you spend it, you need to work and save more before you are able to buy another item. The dollar amount you give can be determined by you, but keep the allowance dispersed at given times to teach responsible money management.

Teach to save regularly

Get a piggy bank for your child to start saving, or set up a savings account for them. Regularly monitor how much has been saved, and talk to your child about goals for saving and using their money. If you’re giving them an allowance for chores, teach them that a portion should be designated for saving. Giving visuals, such as how much money is in their piggy bank or what their balance is in their account is a great motivator for children to save and set goals. At Cambrian, we offer the Connect Account for members aged 22 and younger. We pay the $5 membership share, and the account is free with the Unfee!

Advise on how to be a wise consumer

If your child wants to buy something, teach them how to comparison shop for prices, deals and quality. Teach them how advertising and marketing is used to persuade consumers to buy products, such as when watching commercials. This will help them to start thinking critically about making purchases, and how to explore alternative and potentially more affordable options.