It’s funny how money is omnipresent in all aspects of our lives, yet schools don’t put enough emphasis on financial education.
The responsibility thus falls squarely on the shoulders of parents, who will shape their kids’ attitudes and habits towards money.
Although money can be a rather abstract concept to explain to the young, there is a myriad of ways to introduce it to them in a fun manner in order to teach the essential life skill of managing our money properly.
1. The Power Of Money
One of the first things we learn about money from young is that money gives you the ability to buy what you want.
Allowing kids to handle money on their own – counting and ensuring they are paying the right amount for their purchases is a great way to introduce to the use of money.
You can get them to pay for your purchases for you at the food court or grocery store so that they learn to pay the right amount and to count the correct amount of change they should receive.
2. Make Them Work For Money
When kids have learned that they can use money to buy what they want, it is important to show them that work needs to be done to get money.
When your child starts to demand sweets or presents, use that as an opportunity to make them work for it.
For instance, it could be getting them to complete simple tasks like emptying out the garbage at home, folding clothes from the laundry or keeping their room clean.
This will teach them that money is hard-earned and that they should not expect their parents to accede to their demands for money whenever they want.
Making them work for money and then saving up to buy something they want also teaches them to delay their impulses to purchase.
3. Spend Wisely
After they’ve learned about working for money, the next thing you can teach your little one is to make wise spending decisions. Take him to the supermarket with you.
You can give him a little task, such as using a $3 budget and asking him to choose between getting a cereal bar, buying a loaf of bread or getting a family pack of cereal for breakfast.
Guide your child by reminding him how long the items can last. This will probably bring home the idea about spending on items that are more economical.For older kids, you can always include them in setting up the grocery budget and getting them to make spending decisions at the supermarket.
For instance, if you regularly buy HL milk for the family, asks them if they can find a cheaper brand instead of the regular brand you buy. Practice this on the products you buy and you can show them the amount they’ve helped you save!
You can even take it a step further and reward them with the amount they’ve saved by putting it into their bank account.
4. Setting Money Goals Together
When your child starts to understand that he will need to save for a sum of money in order to buy what he wants, it is a good time to introduce the concept of setting a money goal.
You can help by setting up a savings account for them and encouraging them to save by rewarding them.
Teach them that other than saving up to buy something that they want badly, they can also learn to save in order to receive interest, as well as putting money aside for a rainy day.
Do this by setting a goal for them; for instance, set a goal of saving $50 for them and that you will put in an extra $10 when they’ve reached their goal.
These little money habits will set a good example for kids to understand the use of money and how to spend responsibly from young.
By teaching them to fish instead of giving it to them, your child will grow up to appreciate the hard work that goes into earning money and not take the money you give them for granted as well!