Image courtesy of Low Jianwel

It can be very difficult to teach children the value of money. They do not have to run a household and buy all of the things associated with that so it is difficult for them to know how much things cost and how important it is to make sensible spending decisions. Even if they know prices and things it can be difficult for them to understand the responsibility and stress that money can cause. There are some things that you can do to help though.

Once they are old enough, it can be good to give them money to cover the cost of their things and make them buy them. Things like clothing and shoes, can be a good choice. You give them a budget and an idea of what they need to buy and let them shop for the items and compare the prices so that they do not spend more than the money that they have given you.

Telling them what all of the bills are that you have to pay and how much they are can help them to understand a bit more about how expensive it is to run a house. They will also get an idea of how much their things cost as a percentage of your outgoings.

Giving children pocket money can help as well. Giving them jobs to do to earn the money, will help them to understand that if they want money, they will have to be prepared to earn it. It will also allow them to get used to having money and either spending or saving it. Let them have a bank account so that they can save money and understand that the bank will pay them interest for keeping their money in there so that they know how good saving can be. Also show them how to save up for expensive items that they want to buy. They will then learn how much pleasure there is in being able to buy something after working really hard to get it. It can be a good lesson to also let them buy things which perhaps you do not think are good value for money, which might break easily or not give them much pleasure and remind them next time they want to buy something of that experience to see whether they are still sure that they want to spend the money.

Setting a good spending example is also really good for children too. Making sure that they are aware that they need to be careful with money, budget to buy things and only buy luxury items once all of the necessities are taken care of. Whether you have a lot of money or a little, they still need to learn the same lessons as you will not know how much they will have when they are older. They will need to leave within their means however much they have and starting young with an understanding of budgeting and saving can be really useful.