You need to know that money is a challenging subject for a plethora of people. You Can handle it better if you are introduced to money matters. Additionally, you will go a long way in helping them in the future by teaching your children simple financial lessons.
If you are going through challenging economic times, teaching kids about money is significant. Insulating the right spending habits in children could be quite a task in today’s world of consumerism, where going overboard with spending is very common. Now, you might be wondering how to teach your children some important money lessons, well one thing is for sure you don’t need to stress at all as under this blog you will learn everything about it.
Surprisingly, our schools don’t teach children about money, given how critical financial skills are to navigating life. You can instruct your child on critical financial lessons; however, you should do that. The kids need to be taught the essentials about money to help the next generation avoid the mistakes of their ancestors and to live financially fit lives. All we say is that it is up to parents to raise a generation of mindful consumers, investors, savers, and givers.
Parents are quite an important influence on their children’s financial behaviors.
Money lessons to teach your children
- Math games- The majority of the young kids find it challenging when it comes to counting money. So you can start with a simple game like play shopkeeper and present simple addition and subtraction problems. It is both a fun and practical way for children to learn. If you have older kids, you can also teach them the power of compounding and tell them where compound interest applies. The equity investments and your PPF account are a few classic examples. Hence, you can show them a significant difference between simple and compound interest when you track these numbers.
- Piggy banks- You can help your child set a piggy bank or have their own savings account and motivate them to save a little money each week. Advise your child to keep these savings in the piggy bank, a savings bank account, or in mutual funds. The right old piggy bank is the perfect way to start teaching your child all about saving towards goals as life is all about fulfilling dreams, personal and for the family.
From a young age, you need to encourage your kids to put in the money they have received during their festivals and birthdays. Saving money can help your kids meet their “little goals no matter if it is a new Barbie doll or another new battery-operated car. The piggy bank’s main idea is the ideal way to teach them all about fulfilling financial goals.
- Household budgets- You need to ensure that your kids are involved in the household budget, so you can start by playing a game where they estimate grocery bills and learn everyday items’ prices. You can also ask your kids to keep track of all the expenses and then tell them to cross-verifying costs with actuals. All we say is that you must not ignore the routine exposure of money matters.
- Teach them the difference between needs and wants- One of the most important lessons your kids need to learn is to distinguish needs from wants. You can start by taking examples from your learning curve and use lesson sticks. Don’t forget to involve teenagers in family discussions about expenses and purchases. Let your teens teenagers in family discussions about costs and investments if you are planning to buy a new appliance or car and allow them to compare products, features, and pricing.
If you feel it is going above their head, you must guide them. All we say is that you must involve them in decision-making matters. Your kids start understanding a lot about money when they turn 8. At this age, they start demanding fancy stationery, gadgets, and accessories. At this age, you must introduce age-appropriate pocket money on a limited basis.
- Additionally, you must talk to your kids about the amount given to last them through the month. In this way, ensure you make them understand the difference between their wants and needs. For instance, the monthly supply of stationery is a need while shoes and gadgets are a want. You need to draw out a monthly budget to help him prioritise his needs. All you need to do is encourage them to use their money wisely as children are eager to learn, and a budget can surely come out.
- Teach your children about Saving, Sharing, and Spending with Allowance- It is an individual decision for each family to know if allowances are tied to chores. A flat budget in exchange for the basics expected of them as it is one method that works well is to give kids and allows them to earn more with bigger chores. All you need to do is emphasise that saving and sharing are just as crucial as spending, but you deal with allowances. If your kids are young, talk to them about setting aside money for saving and for charity in separate piggy banks or envelopes. On the other hand, if you have older kids, ask them to use a bank account for setting aside a portion of their allowance.
- Teach them the importance of giving- No doubt, earning, saving, and spending is essential, but at the same time, your kids must know that helping out those less fortunate is essential. Make your kids understand why you give money to charity and encourage them to provide some of their allowance or other earnings to the less fortunate. For example, help your child raise money for animal shelter if he or she loves animals. Find out if he can help with your local Meals on Wheels program if your child is fond of his grandparents or great-grandparents.
- Introduce them to plastic money- It can be challenging to introduce plastic money to your teenager. Teenagers would love to go on shopping sprees, outings with friends, and movies at the brink of adulthood. You need to ensure your child has understood its usage, loss implications and is capable of being responsible with it if you do wish to give them a card. Also, make them know that it can lead them to a debt trap if credit cards aren’t used wisely.
Hence, teaching money management to children is about setting a good example, whether you are aware of it or not.
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