DEVELOPING responsible money habits is probably one of the most worthwhile lessons any parent can teach their child. It fosters independence and establishes a sound financial foundation as children grow into adults.

Manager of group financial partnership support & financial education at JMMB Group, Michelle Sinclair Doyley believes it’s never too early to teach or reinforce money lessons with children.

She says parents should start teaching their children practical money lessons to help them navigate financial situations from an early age. Sinclair Doyley shared some tips which parents can use as a road map when guiding children to making sound financial decisions.

1) Budgeting lesson: Managing your expenses especially in times of uncertainty and/or of reduced income is critical to your survival. Now is a great time to help your children to understand realistically the cost of items and make the connection between using water, light, buying snacks and toys, etc, and the corresponding expenditure/cost.

As Jamaicans would say, ‘Every Mickle Makes a Muckle’. The lesson from this is that you should involve your children in your monthly budgeting, so they can determine their wants vs needs and the importance of conservation. You can make it a game for them to determine the daily expenditure, by dividing the monthly bills by 30 to find an average daily cost, and then the yearly expenditure by multiplying the daily cost by 365. It is amazing how little costs can add up! Give your children the “Ministry of Conservation,” portfolio with the responsibility to suggest and implement conservation ideas and track expenditure before and after their conservation “policies”.

2) Cash purchase vs loans lesson: Loans are not bad, but many children do not grasp that loans cost more, and consume future cash that could be used for other purchases or investments. At this time, you will also want to preserve your cash and only take a new loan, if necessary. If you have other loan payments continue making payments regularly, but if you are having financial challenges be proactive and ask your financial institution to defer payments or reduce interest payments. Use this opportunity to share with your children the difference between a cash payment and a loan, asking them to calculate how much more the loan costs vs. buying it cash.

3) Be an owner, not just a consumer lesson: When walking the supermarket aisle ask your children, to identify products they like and you can tell them how they can be shareholders of these companies by buying shares on the Jamaican Stock Exchange (JSE). For example, if they like Vienna sausage or Frosted Flakes, they could save to buy GraceKennedy shares or Lasco shares.

Appoint your children “Ministers of Investment” and offer them the opportunity to invest the money they have saved, with your help, in becoming an owner of some of these companies.

4) The importance of giving lesson: Even though you may not have as much disposable income, you and your children can identify a person or organisation in need and help, without busting your budget. Some examples of how you can help others include: delivering groceries or medication to an elderly neighbour who may be more vulnerable, or saving loose change in a jar, and use it to buy some food or sanitary items for someone in need.