Last updated on November 30th, 2022 at 02:12 am
As a parent, so many of the things you do can affect how your child behaves and grows. And, of course, you want to make sure that your life choices set the best example for your kids. We all want our children to grow up to become healthy, happy individuals who take responsibility for their decisions and actions.
You can start by setting an example with good money role modelling while your children are still very young. Our kids learn by watching us, and this includes the ways we spend and save money.
Tips for Good Money Role Modelling
If a child sees you spending large amounts of money without a lot of thought, they might think that behavior is the norm, which can lead to them struggling with money in adulthood.
While you might have your own investment or savings account, opening a savings or a junior ISA account can help to build a saving mentality in your child. They’ll get excited about seeing their money grow, knowing there’s a little nest egg set aside for them for adulthood.
You could also incorporate some pocket money into this, allowing your child to put their own money into savings. While this may not allow them to buy the toys and trinkets that they want right now, knowing that they will someday be able to afford a vacation, or their first car, can be something they’ll want to work toward.
Sticking to a Budget
Adults have to budget every single day, manage to make a paycheck last, and pay for all of the family’s essentials. Although it’s unlikely that your child will be paying their own way now, you can still teach them the importance of good budgeting.
This can be achieved pretty simply, especially for younger children. When they have money to spend, you can make it clear to them what their budget is, and then allow them to find items within that spending limit.
While it can be tempting to top up their money if something they like costs more than they have to spend, this won’t help them learn to live within their means. Instead, they can either find something that costs less and fits their budget, or they can save their money, and wait until they can afford the item they want.
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Wants vs Needs
We’d all like to say yes to everything our child wants; however, this can teach them to believe money comes easily, has no limits, and that they don’t need to work for what they want. A lot can be said for parents who say no on occasion. Not only will this teach your child that they cannot always have their own way, but you can also use this as an opportunity to differentiate between wants and needs. For example, you might say “no” to a new video game, but “yes” to a new schoolbag. Teaching kids that necessities come before wants may also help with reducing impulsive purchases in the future.
To be clear, good money role modelling doesn’t mean you can never have fun. Instead, it’s about showing children the true value of money and how to use it wisely.
Do you have any other ideas about how to set an example of good money role modelling? How do you try to set an example for your children? Leave us a comment below.