5 Essential Ingredients To Teach Your Kids About Money

It’s hard to believe that one of life’s most important skills, financial literacy, isn’t taught in our schools. It’s up to parents, guardians, and caregivers to navigate and share these essential life lessons. So where do you start? What if your own money habits leave a little to be desired?

It can be particularly daunting when you realise by age three children understand the basic concepts of spending and saving, and by age seven their money habits are already being formed

It may be tempting to jump right in, break out the piggy bank, set up the chores chart, and start talking money, but wait: before you jump in boots’n’all, take a look at these five preparation tips which will go a long way in making your money lessons a success. As the saying goes, “By failing to prepare, you are preparing to fail.”

1. Know your money attitude and values

Children are like sponges: without us even knowing it, they absorb our attitudes, expressions, mannerisms and life perspectives. As time goes on, these form significant parts of their identity. So, it is important that we are aware of own money attitudes and the conscious and subconscious messages we pass on when dealing with money. Are you a spender, hoarder, avoider? See money as freedom, security, power, or an expression of love? All these things can influence how your kids relate to money as they get older.

Going hand in hand with money attitudes, it is important to know your money values, or—more importantly—the money values you wish to instil in your child and model as a family. This is the bit that can often trip parents up. It’s not uncommon for you and your partner to have different money values. The essential thing here is to communicate and accept your differences, but also find common ground and prioritize the key values you want to instil in your children so both of you are delivering the same message when it comes to money.

2. Understand how your child learns best

I’d be the first to admit that money isn’t the most exciting subject in the world, and it has the potential to become a thousand times more boring if you sit a child at a table who loves being outside to learn. Younger children learn best via imitation, learning from experience rather than instruction. As parents, you’ll know the activities and things that hold your child’s attention and interest. Ask yourself: What is something they can do for hours on end? They might enjoy craft activities, books, computer games, outdoor activities, pretend play; whatever it is, it will be important you cater to what they enjoy so they have the best opportunity to learn.

3. Commit to teachable moments

A teachable moment is an unplanned event during the day that you can use as a learning opportunity. Kids often ask questions piqued by their curiosity, and this is one of the times when they are most open to learning. Sometimes these questions come at the most inopportune times or can be a little tricky to handle in a public setting. By making the commitment to yourself to take the time to answers these questions, you encourage a child’s life-long learning and instill a valuable lesson.

Although teachable moments can’t be planned, you can plan how you’d answer some of those curly questions that kids often ask. Take, for example, the plain old shopping expedition: there isn’t a parent on the planet that hasn’t at some stage experienced the I-want-that-why-can’t-I-have-that moment. Rather than the immediate shutdown—”We can’t afford it” or “You just can’t”—this is a great opportunity to introduce the concepts of budgeting, want versus need, or even saving.

4. Make it fun

That might seem like a pretty obvious point, although it is definitely a point worth making. Numerous studies have shown that making learning fun assists with the processing of information and activates the long-term storage area of our brains. The more mystery, discovery, humour, and playfulness that you can incorporate, the better your chances of long term success.

5. Be consistent

Learning about financial literacy is like learning to read or ride a bike: you don’t just do it once or twice and expect to have it mastered. Regular and consistent practice is what makes you successful.

Ideally money talk needs to be a consistent theme throughout a child’s life tailored, to their level of understanding and pace of learning. It is not just a lesson to be ticked off the list as a job well done. It’s a continual learning process.

One final thing to remember: you many not feel like a money expert, but compared to a child you have a PhD in money matters. Don’t be afraid to start sharing what you know sooner rather than later.

Caroline Oxford is a Social Entrepreneur with a passion for conscious consumerism, environmental awareness, and community mindedness. Through more than 15 years in the banking industry, experience in the not-for-profit sector, and work mentoring troubled youth, Caroline’s eyes were opened to the social, psychological, and environmental fallout associated with a lack of financial capability. This led her to establish Money Mindful Kids, helping parents and caregivers provide kids with foundations of financial literacy through fun, easy activities and ideas that nurture a positive money mindset and help create a better world through money mindful decisions.