Learn how to give your child a healthy money mindset that will empower them to stretch out their pocket money and later their income by prioritising what is important and understanding that money alone does not bring happiness.
Teaching a Positive Money Mindset to Your Kids
In this article, Cashfloat – offering online loans from a direct lender – explains how to provide your children with a postive money mindset.
Competing Financially with their Peers
Financial competition is one aspect about handling money that is quite difficult to teach to children. This is especially if you are constantly comparing your lifestyle to that of others who are better off. Children will soon pick up on conversations about better cars or bigger houses so try not to constantly compare your lifestyle with others.
If you do, the message you will be sending your children is that only a lot of wealth or conspicuous spending can make you a success in life. If this lesson becomes ingrained into their minds children will start comparing their own possessions against the material objects of others. This can lead to a loss of self worth when the other child has more expensive trainers or the latest smart phone.
It is a great idea to encourage healthy competition. However, try to keep this to sport or other activities that are not connected with money. The best motive a child can receive is to compete against themselves. Inspiring a child to do better because it will empower them is the best motivational tool you can use. Try to make them understand that money is a means to an end. It is not the end itself. If you can instil the message that money does not bring happiness you will be giving your children the most valuable lesson in life.
Be Good Role Model
Above all, it is important to be the role model from which your child can learn about good monetary habits and get a postive money mindset.
If you don’t have good financial habits yourself you will not get your children to understand how important it is to save or to pay bills on time. Even young children can be taught the importance of prioritising money to pay for rent or household bills. Here are some fun ideas to help children get a healthy money mindset:
- Make a game of finding the best bargains when you go shopping.
- Involve your children in your weekly shopping trips. This will teach them about:
- Impulse purchases
- Buying essentials first before moving on to treats
- Sometimes, more expensive good quality products save more money than cheaper alternatives
- Take them to a supermarket and give them £5. Tell them they need to make a healthy supper with this money for 4 people.
Helping Your Children Understand How Money Really Works
Teaching your children how to develop financial skills and to understand the concept of affordability is essential for their personal development.
- Credit Cards or Debit Cards – It is important to make children understand that this is real money. You are spending money that needs to be paid back.
- How an ATM works – Explain that it is not a money tree but a machine that holds the cash you have earned by working.
- Cost of Electricity and Gas – Children may not know that living costs money. The cost of watching TV, cooking and taking a shower all add up. Explain that using less electricity saves money.
Just a simple explanation about these everyday matters will help your child to get a grasp of economics that will allow them to understand the importance of money and how it can be controlled.
One of the most important life skills you can show your children is the concept of how money works. Another important lesson is explain hoe to stay out of debt. Teach them about how it costs money to borrow money, especially short term loans. Explain how debts can get out of control and understanding this now will help them when they are older. Children must understand that they will need to make independent decisions about financial matters. Showing your children how to be financially smart can lead them to a happier and more fulfilling life. It may help them avoid the deadly trap of debt and gives them a solid financial future.