It’s a saying that most of us heard time and time again. When we wanted that new bike, the latest trainers, or to visit that exciting new theme park, at one some time or another, our younger selves will have been greeted with those dreaded words.
Although, for children, the phrase ‘money doesn’t grow on trees’ sounds like another way of their parents saying ‘no, you’re not allowed’, it’s actually really important that you teach your little ones the meaning behind the famous phrase.
Yes, it’s true that money doesn’t grow on trees, but where, in fact, does it come from? How can we save it? And when should we spend it?
Bank Accounts
Firstly, it is important that your children understand that when you take money out of your bank account, this is actually reducing the amount of money that you own. Explain (in appropriate terms!) the concept of current accounts and savings accounts, and then let them open their own accounts so they can put their newfound knowledge into practice!
Credit Cards
Many adults often forget that credit cards aren’t an endless source of money that never has to be paid back. So it’s easy to see how children might become confused when they see those around them flashing the plastic.
As useful as it is, credit can have consequences, so it is important that you properly educate your little ones in the concept of credit. As well as talking them through the processes of borrowing, repaying, and interest, it’s a good idea to show your children a credit report (you can access it free through Experian) and talk them through how making bad credit decisions can affect them in the future.
Hopefully, if you instill positive attitudes from a young age, they’ll be sensible and responsible when they reach the grand old age of 18.
Save, save, save!
It is absolutely never too early to teach your children to save. From the moment they are born, they will almost certainly start receiving small amounts of money from family and friends. So set them up a savings account straight away and, as soon as they are old enough, explain to them how much money they have, where it has come from, and how, by adding to it, they will be able to buy the things they need (or want) in the future.
Spend, spend, spend!
That’s not to say that you shouldn’t allow your little ones to enjoy spending their hard-earned cash. If there’s something they really want, and they can afford it, encourage them to treat themselves every now and again. If they can enjoy the rewards of saving, they are more likely to keep up the good work!
disclaimer: this is a collaborative post