Vivi Friedgut is the managing director of independent financial education company Blackbullion and author of Money Smarter – a family guide to finances. Here she offers some exclusive suggestions on how parents can encourage saving and budgeting in the home.
Save, save, save!
The best thing that parents can do for their kids is encourage them to think about the financial consequences of decisions they make. Parents can encourage their kids to consider saving some of their pocket money so they can afford bigger ticket items. This can be done off the back of understanding budgeting and demonstrating to kids that what comes in must be sufficient to cover everything that goes out. Finding a picture of the item desired and sticking it to a wall in their room with a target sheet on which they can tally up their savings can act as a great motivator.
Offer money as reward for hard work
Offering additional chores, or providing bonuses for jobs done extra well or extra fast, encourages kids to have a strong work ethic and to understand that those who work harder may see greater results.
Get them interested in the markets
Finally to help children understand the concept of investing sit with the finance section of any paper and let your child pick a share they find interesting. Encourage them to keep track of its performance and analyse simple events which might have an impact on any major movements, e.g. the performance of a competitor, general market moves etc. This is suitable for older kids and gives them an appreciation of inter-connectedness of the market as well as the foundations of the stock market.
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