01 Start talking about money early and make it practical
It is important to start talking to your children about money as early as possible. The Swiss Pocket Money Study by Credit Suisse found that over 80% of young people in Switzerland would like to learn more about money and finance from their parents and at school.
As a parent it’s hard to know when to start talking to children about certain topics such as money but our daily lives are full of ‘money moments’. Take such a simple situation as grocery shopping. You make a list together with your child at home and then count it as you go to show them how you’re budgeting. Use simple terms and concrete examples to help them understand the value of money. For example, explain that the toy they want represents a certain number of hours of work.
02 Encourage goal setting
Introduce the concept of financial goals through savings jars. Set up separate jars or labelled envelopes for different goals, such as saving for a toy or a future purchase. Encourage your child to allocate a portion of his or her money to each goal and track progress. This visual representation will help to understand the connection between saving and achieving the desired goal. Work with your child to create a goal chart or vision board. Include pictures or drawings that represent their financial goals.
03 Teach wise spending
Teach your children how to spend money wisely by involving them in purchasing decisions. Show them how to comparison shop, look for value, and evaluate the quality and durability of products. Explain to them why you buy certain things – for example, private label versus brand and how it might be a cheaper option. Teach them to distinguish between wants and needs and the importance of delayed gratification. For example, in the supermarket, explain how to be a good steward of money by spending on needs before wants. Or create role-playing scenarios where your child pretends to be a shopper on a budget.
04 Introduce philanthropy
Show your children the power of giving back by involving them in philanthropic activities. Have family discussions about social causes and charitable organisations to help them understand the impact of their contributions. Encourage them to set aside a portion of their savings for charitable giving to reinforce the value of generosity and empathy. Also, let them choose a cause to support.
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05 Develop entrepreneurial skills
Help your children understand the process of earning money through entrepreneurship, whether it’s setting up a lemonade stand or selling handmade crafts. Such experience fosters creativity, resilience and an understanding of the value of hard work and innovation.
06 Lead by example
Finally, an important educational practice is to set a positive example that can shape their attitudes and behaviour towards money. Children often learn best by observing their parents’ behaviour. Model responsible financial habits such as budgeting, saving and making informed spending decisions. Talk openly about your financial decisions and involve your children in relevant discussions, emphasising the reasons behind your choices.
