Financial education begins at home and summer is a great time to have an open and honest conversation with your children about money and how to have a healthy relationship with it for life. When I am coaching my clients to claim their lives both personally and financially we always discuss where they learned their money habits from and what their relationship with money is today. Unfortunately, most of the time, they did not learn them at home or if they did, they were not the right habits to form and many of them admit to having a terrible relationship with their money. Often they are in a situation where their money is controlling them instead of them controlling their money.
I fondly remember my father taking my sister and me to the bank to open our first bank account where we had to deposit half of our weekly allowance. We were allowed to spend the balance on whatever we wanted but I learned from an early age about paying yourself first. I was an entrepreneur from the age of eleven running two successful home based businesses and babysitting on the side. Half of everything I made went into the bank. It was such a thrill for me to go to deposit my earnings, get my bankbook updated, and watch the numbers go up.
As my daughter was growing up, I worked to make sure that she learned about the value of money at home and her education started at the age of six after a day of shopping with her. We were finished and ready to head home when she announced that she was hungry and wanted me to stop somewhere because of course she was starving to death. I informed her that I had no more money left in my wallet and opened it up for proof. No word of a lie this is what she said to me, “well we can just go to the bank and you can put that plastic card into the machine that spits out money every time you do”. It was as if she had hit me up the side of the head with a velvet hammer. Lesson number one about money commenced at that exact moment,” my darling child in order for the machine to spit out that money mummy has to go to work to earn the money to put into the bank so it can come out of the machine.”
Therefore, to help you to get the family discussion going to form the ‘right’ money habits here are my 10 top tips.
- Be open and honest with your children that money does not fall from the sky; you have to go out and earn it.
- Start them on an allowance when they are old enough to do something around the house to earn it.
- Take them with you to the bank, open up a bank account for them, and have them deposit half of their allowance each week.
- Make sure you are exhibiting good money management around your children.
- When making major purchases involve your children in your decision making process by helping them to understand where the money is going to come from to pay for this new item.
- Let your children in on how much it costs to run your household. I did this with my daughter when she was in grade ten. I sat her down with my pay stub, a calculator, a pen and pencil and it was a real eye opener for her.
- Talk to them about credit cards, especially if you have university bound age children.
- If your children want an expensive item, invite them to save up for a part of it. It is amazing how much more something is appreciated when they have their own money in the game.
- When they start earning a paycheck, have them get into the habit of paying themselves first by putting a minimum of 10% of their earnings into some form of savings.
- Teach them to understand the consequences their actions can have on their credit rating if they get into financial difficulties.
Financial education is one of the greatest gifts you can give your children and I will let you in on a little secret, it is free. Understanding the impact money makes in one’s life is one of the greatest lessons a parent can teach their child. In a nation where people are drowning in debt and looking for salvation, equipping your children to take charge of their financial future will help them to grow up to be self sufficient, confident and a positive example to others.
To learn more tips and strategies to help you take control of your family’s financial future you can order my bestselling book, WITH THE [STROKE] OF A PEN®, Claim your life. Follow me on Twitter and join the Claim Your Life Community on Facebook.