Last updated on July 27th, 2021 at 06:08 pm
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 an 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. Starting in their early years, you can help by modelling the behaviors you would like to see in your child. This can include the ways you 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.
Using a Budget
Adults have to budget every single day, manage to make a paycheck last, and pay for the 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 simply, especially for younger children. When they have money to spend, you can make it clear to them what their limit 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 their budget, this won’t help them learn to live within their means. Instead, they can either find something that costs less, or they can wait until they can afford the item they want.
Wants vs Needs
We’d all like to say yes to everything our child wants; however, this can teach them to expect to get their own way, and that they don’t need to work to achieve results. 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 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, being a good role model for your children doesn’t mean you can’t have fun. Instead, it’s about showing them the true value of money and how to use it wisely.