It is essential to teach your kids about money at a tender age. If you fail to do so, somebody else will and, of course, in a hard way. Therefore, don’t take risks; start teaching your kids about managing finances as early as now. Here are tips for teaching your kids about money:
Introduce money concept
Start by teaching your kids what money is and its value. Give them coins and ask them to save their cash in a jar or piggy bank. If possible, use a transparent jar so that your kids can be motivated to fill the jar. That way, they will learn that money grows through saving consistently.
Play money related games
Board Games such as Life and Monopoly are a smart way to teach kids about money. Asks the entire family to join your games and let your kid unleash their inner mogul.
Model the talk
When handling money matters like writing a check, call your kids, and explain to them what you are doing. Also, let them know that when you use an ATM card to pay for groceries, the money is deducted from your account. Take advantage of such instances to teach your kids about spending responsibly. Kids are observant and learn by watching your behavior.
Open them a savings account
If your kids are of age, teach them about compound interest. Open a savings account and let them know that their money will grow with a certain percentage.
Use an allowance
Giving your kids an allowance is a brilliant idea. Develop strategies to ensure that the allowance is partially gifted and partially earned. When you provide them with an allowance, it will be practical when teaching them about rationing and basic budgeting.
Let them know mistakes are there to be made
Even people with top-notch budgeting skills make money mistakes. Let your kids know that they are prone to money mistakes. However, they should learn from their own experiences to avoid wasting money in the future. Give an allowance in the sense of a commission, and your kid can only earn a commission for every completed household chore.
Help them to create a budget
Let your kids’ budget for small family events such as a baking session. It is also prudent to teach them about opportunity cost. For example, let them know if they buy a video game, they won’t have enough money to buy a dress. Your kids should know how to weigh decisions at a tender age.
Avoid impulse buying
When shopping, your kids will often tell you to buy them a dress, a toy, or a kid tablet after seeing it. Avoid giving in to their demands because they can capitalize on impulse buying, mostly when using someone’s money.
Instead, let them use their commission to pay for the item. Encourage them to take time before buying an item an expensive item.
Teach them to give
After giving your kid’s commissions, introduce them to the concept of giving. They can decide to donate to a church, a charitable cause, or someone in need of help.