Amanda Cassar (Financial Advisor at Wealth Planning Partners) found when interviewing case studies for her book “Financial Secrets Revealed” that most children haven’t been taught how to manage or the value of money.

With the technology changes and advances, can you think back to the last time your children purchased something using cash?

Apple and Google Pay and pay later schemes have given us multiple options to choose from, making handing over cash a thing of the past.

With contactless payments becoming increasingly popular, many parents are struggling to help children understand the value of money.

So, how do you set up your children for financial success?

It all starts by setting an example and putting thoughtful consideration on what you do with, and say about, money in your own home.

Amanda explains “our children are sponges, so we need to be very careful about how we speak and the messages they receive about money”.

How your children perceive managing money all depends on how and how often you talk about money. As a parent do you give the perception of managing money as being difficult, private or secretive, easy, burdensome or associate it with a negative emotion or outlook? Most people have heard the expressions used in the households “Money doesn’t grow on trees, it takes money to make money” and so on.  We need to think, as parents are we building a scarcity mindset rather than one of abundance?

Being transparent about your finances can help turn negative emotion into a less daunting subject whilst showing how it can be successfully managed and have value if managed correctly.

Secondly, help them understand the emotion around money by explaining the psychological aspect of why they want to spend.  Explain the hurdles and obstacles they will face in life. Something as easy as getting caught up in the emotional pitfalls of FOMO (fear of missing out), having to keep spending to keep up with their friends, the latest trends or what everyone is buying to maintain their image.

These pressures can be really hard control emotionally, but it’s important our children are given the tools to understand why they want to purchase something and whether the item or memory will hold value for them.

Finally, teaching your children to make smart, practical choices with how they spend their money.  Show them how they can implement a thought process when making purchases. Teach them to stop, pause and think about why they want to purchase an item. Ask the question “Is it worth exchanging this money for this item? Or should I save it and use it for something else?”

“Learning to make conscious choices is a really important tool to help children value money, especially if they can’t count it in their hands like cash.”