Managing finances at a young age was something that I naturally wanted to do. I was personally driven by my own wants and needs not those that were pushed upon me through media sources and the like.
These days, with access to the internet at our fingertips, young adults are often confused about the life that seems “promised” and the life they are leading. Having the latest gaming console or the latest designer handbag is quickly becoming seen as a need rather than defined as a want for many young adults. Whilst the great Australian dream of owning a home doesn’t rate as a top priority anymore with many simply palming the notion off to higher property prices keeping them out of the market.
Whilst this contributes to the problem, whatever happened to understanding the value of a dollar and making that dollar work for you? Are we not using the time wisely to educate our children, whether it be around the home or within our schools, early enough to understand how to make their money work for them?
Financial skills are invaluable in all stages of life, regardless of the level of finances one has. Management of what we have can lead to an understanding of how we can utilize those resources for reaching our goals.
Learning basic life skills such as discipline, respect, tolerance, acceptance, at an early age makes for a greater grounding for our children in their adult life. Why not add financial skills to this set also? From doing chores around the house for pocket money to getting a part-time job once we reach 15, understanding how to save rather than squander our cash can provide a great grounding for later years.
Here are some suggestions to assist children in learning about money and controlling finances;
1. Ask them to write down a list of things they would like. Whether it be a toy, clothing … anything. Have them research, either through looking in catalogues or online for the cost of the product or service. And ask them to work through, using basic maths skills, how long it will take them to be able to purchase the product or service based on the income (pocket money or part-time/casual wage they have).
2. Have your children keep a journal of the money they have received and what they have spent it on so that they can see just how much of their money goes where. This may enlighten them to their early spending patterns, something that can always be altered with the right knowledge.
3. Give them scope and skills to negotiate with you on things like pocket money rates, or chore rates based on effort. This will provide them with the skills necessary to understand the connection between reward and effort and even assist with future negotiating skills for when they enter the workforce.