Teaching children about money, in simple steps

Warren Ingram, personal financial adviser and Executive Director of Galileo Capital, shares his advice on The Money Show.

We're known as a nation with a poor savings culture, and of course the current pressure on consumers is not helping either.

But teaching your own children about money can set them on a solid financial path for the future.

Bruce Whitfield delves into this important topic with Warren Ingram, personal finance expert and co-Founder of Galileo Capital.

While the lack of financial education in our schools is one thing, that doesn't absolve us as parents and other family members from teaching our kids some valuable money lessons early in life, says Ingram.

"I 100% agree it should be part of the curriculum and it should be age-appropriate going right through school... but in the absence of that it's not difficult to do at home. But it does take a little bit of effort from parents and a bit of homework get it right."

"By understanding concepts like budgeting, saving, investing, and avoiding debt, children can develop the skills necessary to make sound financial decisions."

Warren Ingram, Executive Director - Galileo Capital

This is even more critical in a country where virtually a whole generation was not part of the formal financial system and their children might now be the first earning salaries in the formal sector, Ingram says.

"It can be difficult to transfer knowledge that you haven't got yourself."

Here, starting to teach your kids about money starts with teaching yourself first, he notes.

"Make sure that, number 1, you are learning how to budget and, no 2, that you're sharing those lessons with your children...

"...at the right time and in the most appropriate way you can by teaching them lessons in the home, every single day. It's not a once-off thing before they go off into the big, wide world."

Warren Ingram, Executive Director - Galileo Capital

Ingram shares his tips on how to do this.

TEACHING CHILDREN ABOUT MONEY

Start Early: Introduce basic money concepts to children as early as possible. Use everyday situations like shopping trips or buying treats to teach them about the value of money, budgeting, and saving.

Teach the Value of Money: Provide your children with pocket money tied to chores to help them understand the value of money and the concept of earning. It is especially important to link the ability to earn more through more effort.

Lead by Example: Children learn by observing their parents' behaviour. Demonstrate good financial habits such as budgeting, saving, and investing so that they can emulate these behaviours in their own lives.

Set Clear Goals: Help them set clear financial goals and teach them how to work towards achieving them through saving and budgeting. This will instill a sense of purpose and motivation to manage their finances effectively.

Gamify the process: We can learn a lot from social media companies that gamify our behaviour. It's possible to use the principles from these platforms to create better financial behaviour. (e.g: The Game Of Life, Rooster Money, Bankaroo)

Scroll up to listen to Ingram's advice in detail