Although children are now getting some financial education in some schools, the curriculum is still very limited as there are so many things that they have to learn on the curriculum. As they approach an age when they start to get interested in money, they also reach a time when they need to cover important work on the school curriculum and may not be able to have the time to learn it then. This means that it can often be down to parents to help their children and they may need some pointers with this.
Talk Them Through the Things You Have to Pay for
It can be useful for them to know what sorts of things you have to pay for and how much they cost. This will help them to be prepared that they will not just be earning as an adult and be able to buy whatever they like but also help them to realise the importance of getting a decent wage. For example, if they know how much you have to pay on all of your household bills each month it will help them to think about how they will pay for theirs and whether they should be starting to think about how they are going to be able to afford it as they are older. It can also be a good opportunity to talk to them about how you budget to make sure that you have enough money so that you can afford to pay all of the bills. If you find it hard to manage, tell them that so that they have an understanding of how important it is to make sure that you are really careful with your money and how you use it.
Explain Good and Bad Debt
It can also be a good idea to have a chat with them about good and bad debt. It is easy to misunderstand debt and some people think we should never borrow money because it always leads to problems or that we should treat debt as if it is extra spending money. Neither attitude is a wise one to have. We should use debt when we need it to help to better ourselves, such as to buy ourselves a home. We should not use it just to buy treats and luxuries as this will means that we will end up paying out a lot more money. We should also think carefully about which type of loan will suit our needs the best and compare the costs of loans so that we are able to make sure that we are not paying more than necessary for the loan that we have taken out. Also, that we check first as to how much the repayments will be so that we are sure that we will be able to afford them.
Explain the Importance of Saving
It can also be a good idea to make sure that we are careful to explain how important it is to save money. Saving up money can give us money to use if we need money quickly, perhaps because we have got an unexpected bill or need to pay to repair or replace something. It is also reassuring to know that you have money available if you lose your job or cannot work for some reason as well. You will also be able to save up for things and buy them without having the expense of borrowing money. Helping them to start saving at a young age, by opening them a savings account and encouraging them to save money instead of spending it or saving some and spending some can be a good way to also help them to learn about saving.