Kids are always learning about money whether you teach it to them or not, so let’s make sure that they learn the right things when it comes to money management shall we?
- Piggy banks are a great idea to teach children how to save money, but it’s not very visual for them, as children tend to learn better when they see what’s happening. Give them a clear jar as their piggy bank so they can see how the savings “grow” as they put money into it!
- Teach them to weigh spending decisions before buying things by showing them what opportunity cost is all about. For example, “If you buy this pair of shoes that you don’t really need right now, you won’t be able to buy those new books that you wanted!”
- Show them that things cost money by letting them pay for the things they buy from stores. Instead of saying “This toy costs $15”, let them take money out of their savings jar and hand it to the cashier so they understand that they need to be wise about spending money.
- Instead of merely giving them allowances, assign small tasks for them to do around the house that will earn them their “commission”. It could be simple tasks like taking the trash out, cleaning their room or putting the toys and books away.
- Teach kids the importance of giving by having them volunteer and give back to the less fortunate. Children should be taught that giving of their time is an important way to help others even if they don’t have a lot of money to donate.
- If your child is teenager, help them open up a “save for college fund” and encourage them to take on summer jobs or other part-time opportunities that will help them save for the future and avoid having to take on that hefty student loan!
- Avoid letting your child get into the habit of “impulse buying”. This is a trap that even adults fall into frequently, so the next time your kid comes to you and asks you to buy them that cute dress or those cool shoes, tell them to use their “commission” to buy so that they know not to indulge in impulse buys and learn the value of saved money.
- Contentment is a concept that we all struggle with on a daily basis. Teach your child that comparisons lead to discontent and what they have at the moment is perfectly amazing without having to break the bank in order for them to be like someone else.
- Talk to your teenager about the dangers of over spending or over using the credit card. Debt is a bad idea and the sooner they learn about this, the better.
- Last but not the least, lead by example. Children learn by seeing and when they see you taking wise decisions about your money management, they will follow your lead.
Written by: Arathi Aravind