Here is an idea submitted by Yoke Lin for Dads for Life Toolbox that will help you to teach your children skills that will allow them to learn financial prudence and plan for their future.

“My idea is about teaching children to appreciate the value of dollars and cents. Every time your child wants to buy an item, like a toy for example, let him understand that he will have to work to buy the item. He will then learn, not only to appreciate the item bought, but also that there are different ways to earn money. Explain to him that money is not easily earned and that as parents we should not spoil children by giving in to their every request and demand. Sit down with your child and establish a list of goals or material items that he wants. Tell him that in order to save for these, he can help with the housework and either clean the floor, wash the dishes or water the plants for, say, $1 each time. Tweak the task to his skill level as he grows older. To further encourage saving and help him achieve his goal faster, give him a bonus $5 for every $30 saved within a certain time frame.

Parents and kids will love this because your child will be happy watching his money grow. However, do guide the process and help him weigh the pros and cons when he makes his purchases. This can help hone his decision making skills. For example, ask if he prefers ice-cream at $2 or reading a $2 educational book. Give him your opinion and ask for his. Explain that an ice cream is more of an occasional treat whilst a book will enrich his reading skills and have a more lasting impact. Remember to praise and reward your child with little treats so he knows when he is doing the right thing.”

Adapted from an idea by Yoke Lin and first published on 18 Mar 2013 on the Dads for Life Toolbox Website.