As long as teaching your children the value of money is concerned, the sooner you do the better. It is only when you impart such important money lessons while they’re young that you can raise financially responsible individuals. You have to see that he imbibes good money management skills, builds a strong financial foundation which easily lasts till adulthood and through which he can make a lifetime of smart money decisions.
It is sad enough to note that 75% of parents hesitate to talk about money to their kids, as per a research done by Forbes. If you want to bank in on the opportunity of having a talk about money with your kids so that you can initiate a valuable conversation with them, here are few tips that you may take into account.
1: Speak to them about money
One of the foremost ways in which you can teach your kids about money is by talking to them about it. While he/she reaches 3 to 4 years of age, try and tell him the difference between wants and needs. Even toddlers, these days, are able to understand that people earn money by working and you can’t buy things without money. Try initiating such conversations with your children often and make it easier for them to understand.
2: Provide them with a fixed allowance
Regardless of whether you have a son or daughter, make sure you give them an allowance every month which is not tied to any household job. You should just give them money so that they start knowing how to manage them in a systematic manner. As they grow up, they can thereafter start earning allowances by doing household chores like cleaning the house, mowing lawns, babysitting and many more. This makes children learn the value of money.
3: Make saving money fun for children
When it comes to incorporating concepts of saving money, physical interaction and visuals are very important to entice children. You can buy them various colored piggy banks or envelope jars where they could happily save money. Offer them small rewards for saving money and make sure you set a good example for them. Don’t splurge in front of them as they are at a vulnerable age where they may start aping their parents.
4: Allow your child to make mistakes
There are times when your children will learn the best lessons from a poor decision. Let them make mistakes and then learn from it. When your child is young, one financial loss won’t be too heavy for him/her. So, let him/her learn from his/her errors and this is how he/she will start knowing the secret behind saving dollars.
5: Refer to real-life experiences
Take them with you to the grocery store and ask them to choose few vegetables within a given amount. Once he/she gets the real life experience, they would know how to prioritize money and buy things which are more urgent and delay the less urgent ones.
So, if you have a kid at home and you’re pretty worried about his/her financial upbringing, follow the above mentioned steps to teach him life’s most important money lessons.