Image courtesy of JD Hancock

Many parents want to make sure that their children will have a happy life with enough money to buy everything that they need as well as some luxuries. As a parent we may not be able to help them financially to be able to do this, but by teaching them about finance, they will have the skills that they need to be able to help themselves.

Education is a really important start to this. In most instances, to get a well paid job, they will need a good education. This means that they will need to work hard at school so that they pass their exams and then they will be able to choose courses that will help them to get good jobs. Even if parents do not feel they are capable of helping them academically, encouraging them to work hard, get their homework done on time and revise for enough time, should enable them to get the best possible grades that they can. They will also need an understanding of maths to be able to calculate how much things cost and whether they can afford them.

Teaching them how to budget is also very important. Helping them to understand the importance of paying or necessities first and then using money that is left over to buy luxuries. This is something which can be taught form books or free online websites, so if it is something a parent is unsure about, there is help out there. Children are now getting a bit of financial education in schools but it is important for parents to add to this so that they understand the real importance of making sure that they keep enough money to pay for food and rent so that they do not need to borrow money and get into unnecessary debt.

It is worth letting them know, from an early age how expensive things are. They may be aware of prices in shops, especially if you point them out, but they may not be so aware of the costs of living in a home such as electricity, water, gas and taxes. It is important to explain the consequences of not paying these things on time and why it is important to make sure that they have enough money to be able to do so.

Encouraging them to save money is also important. If they have money, perhaps pocket money or money for birthdays then encourage them to save it. Many children will go straight out and spend it on sweets or toys but this will lead to the habit of spending money that they earn as soon as they get it. If you show them how to save money and the fact that they can buy more worthwhile things by saving up, then this should help them to form better habits as they get older as well. They will also see how pleasurable it can be to know that they have a nice chunk of money in a bank account that they can use should they really need it.