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Teaching Your Kids Financing 101

Teaching Your Kids Financing 101

Childhood goes whistling past before you can figure out even the basics of financing. The horror of it remains there only till you figure it out. But that is the challenging part. You see most of the educational systems across the world focus on filling the children with bookish knowledge rather than providing practical wisdom. If you were to look up “engineering economics” you would see that there is nothing in the course that talks about actual ways to deal with your finances. It cannot be taught in that way either. But it can surely be taught daily taking up instances from daily life and feeding in quick and simple information and instructions to kids while they can afford to commit mistakes. But then again, how to do that? The answer to it lies just a few scrolls away.

Tips to teach your kid financing:

Most of the time, the things that seem the hardest are quite easily done. The hard part is to get over the fear of approaching the topic or activity. As an adult maybe financing was a hard part to deal with in your life. Do not let the same happen to your children. A debit card company for kids is there to help your kids understand managing finances and its aspects. 

Step1: Plan:

Planning is a very crucial step to achieve anything you want. Dave Ramsay, in his book “Smart Money Smart Kids,” writes how an adult can make children aware of certain kicks and corners of financial dilemmas, in an effortless manner. The whole point of this step is to figure out how to make money and then once you got it, how and where to spend it responsibly. This you can teach your kids by simple everyday examples. You need to catch the teaching moments before they go by. You can either engineer these teaching moments or seize them as they come candidly. 

Step2: Teaching your kids contribution:

The contribution is an important part of finances. You need to know how much and where to contribute to your family. Robert Kiosaki’s book “Rich Kid Smart Kid: Giving Your Child a Financial Head Start” is an amazing guide in this respect. The contribution is a way of using your income responsibly and teaching your kid that, is quite important. Here are some tips that could help.

  • Teach them the distinction between categories of works: 

There are various kinds of tasks that a person needs to do. Children learn to do various tasks on their own with a help of a debit card company for kids. However, you would not be paying them to brush their teeth or do their daily chores. What you could do is to assign them small errands and then reward them accordingly on their completion. 

  • Teaching distinction between social obligations and works that will help them earn:

If you are planning on following this technique of assigning children with small errands and rewarding them when they complete them, then make sure you make the distinction of tasks clear. For instance, make them understand that taking care of an elder in the family is not a payable job, but rather a social responsibility while buying a good from the nearby market for the elderly is a job that could demand a reward of sorts. 

  • Adding value to the work they do:

The next step would be to teach your kids to distinguish between the jobs they should take up and the ones they should decline. Make them understand that a job they must attain must be something of importance, something that would make a change. As children, if they are to attain harder tasks for you, make sure to reward them something extra to commend their good work.

  • Inspecting a problem:

This gears more towards an ocean of opportunity for your kids when they turn into adults. You need to teach them that earning money is not the only goal. Giving a certain value to the work you do is what will set you apart from the others. As an adult, they must know how to go about issues and hence have a basic idea of how to spend their earnings and more importantly, how to get them.

Step 3: Managing the money they earn:

Earning your own money is not the hardest part of the financing. The part that requires more attention is how to make use of it. The four main aspects of using your hard-earned money are as follows:

  1. Spend
  2. Save
  3. Donate
  4. Invest

Simple, right? Not so simple really. It also especially makes your children understand these aspects and yet not overload them with information or anxiety of the future. So how do you do it? You see a child grows into adulthood via various stages of life. You could follow a step by step method as one that follows:

  • 4 to 6 years of age:

In this period, you can teach them the idea of spending. They need to understand what are the commodities that they can spend on and to what extent. They need to realise the equation between earning and spending.

  • 7 to 8 years of age:

Now along with spending the kids must also understand the ways to save money. Saving is a very important aspect of finances and hence must be dealt with with utmost sincerity. 

  • 8 to 12 years of age:

This is a time when you can make them learn the importance of donation. The children must understand what donation is, and where and how far to donate. 

  • 13 years and above:

The children are now stepping into adolescence and learning to be more responsible. This is the time when you make them understand the importance of investing. But be careful to properly educate them about the system of real estate. They must also learn how, where, and how much to invest. 

Tips to help your kids learn:

You could start by assigning little tasks to them and then paying them in cash once the task was successfully done. It does not have an extravagant reward. But the amount must be enough to matter, and so should be the task. Once they grow up and are teenagers, you could also encourage your children to get a part-time job to get their own pocket money. The little steps are what count the most. 

It is always better to learn at the age of 5 than to scramble your way through your finances at the age of 35. But what you must remember is to keep it as light as possible for their little shoulders to carry and for their minds to understand and register. A debit card company for kids can help your kids understand a lot about finances and keeping a tap on it. 

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