Having the kids jump into bed with dad on Father’s Day is a great way to start the morning. Although the experience may not be as enjoyable for him once the kids hit age 30.
With the rising cost of just about everything it’s become more common to see grown-up children not leaving the nest until their 30s.
So it’s more important than ever, that children learn from a young age about the value of money and are taught to be responsible when it comes to earning it, spending it and investing it.
Regular chats around topics like, saving a little of every dollar earned, understanding about the impact of compound interest, and the importance of tracking spending and budgeting are very worthwhile.
Children of all ages need appropriate guidance when it comes to money, but just how do you go about doing that?
Here are some tips that could result in the ultimate Father’s Day gift that keeps on giving – adult children who are financially independent.
Walk the walk
Children learn first and foremost by role-modelling what they see their parents doing. So you can’t just talk the talk if you’re not walking the walk yourself.
It’s important to make sure you have a plan for the future and are on-track financially, or that you are getting guidance in this area and seeking professional help from a qualified financial planner.
Also speak openly and often at home about your plans and what you are doing to achieve them. Little ears are always listening.
That’s Keep It Simple Stupid (KISS). There’s no point giving complex ‘lectures’ about money, it’ll be lost on children and they are likely to tune out because they either don’t understand or are bored.
When you’re explaining a new concept it’s best to give an analogy and an example to illustrate your point – injecting humour often helps children to engage and enjoy learning too.
Participating in games is not only great fun but it can teach young people important financial lessons.
For younger children, games such as monopoly can kick start conversations about investing in property. For older children there are some fantastic online games available that teach money and life skills. Some involve pretending to invest in the stock market and then following the stocks ‘purchased’ over a period of time to see how much money can be made (or lost). Others revolve around budgeting and simulated ‘real life’ scenarios.
There are some great life-long habits children can learn in the family home. In some families great use is made of the old ‘coin jar’ where family members put spare change, add it up and then divide it amongst themselves at Christmas for gift-buying.
Another good habit is to keep a ‘receipt box’ for each person to store receipts from anything purchased. This is a great way to encourage kids to keep track of spending and it’s important later on in life for tax purposes.
As hard as this may be, it does not help children in the long run when they receive all the material ‘stuff’ they want.
Children can learn the value of money by saving up for things they want rather than having their parents buying everything for them. This will teach them to appreciate money and, hopefully, to be responsible with it.
Talk to your children about their goals and help them to put in place a savings plan. The old Chinese proverb, “Give a man a fish and you’ll feed him for a day; teach him to fish and you’ll feed him for a lifetime,” certainly applies to this situation.
The gift of time
Of course, more important than money is the gift of time – consider declaring this Fathers’ Day a gift-free one and request instead that you spend some time together as a family doing something you all love.
With the money saved, you could open a family bank account earning high-interest. Decide as a family what you are saving for and how much per week to add to the account. Track the account monthly as a family project so the kids can see the power of regular savings and compound interest.
At Blueprint Wealth we offer financial advice that is right for you, no matter what stage of life you are at. Contact us today to set up a plan that is right for you.
*Greg Major is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.