Are you one of those parents who keep their children out of discussions about house expenses? Do you feel that they are too young to understand finances? If yes, this article is for you!
Every parent wants to provide all the comfort to their children. Just like you, every parent thinks that it’s not their child’s age to worry about things related to finances and their learning courses. Well, you are not wrong, but there are certain things that children should start learning from a young age. Teaching different things at that stage becomes their habit when they grow old. So, why not imbibe good habits when they are younger so that they can thank you later?
This article is about providing your kids with financial literacy. Here, you will get to know about seven points which will make your eyes open to the fact that even your younger children can handle money effectively. Do you realize the best thing? They will learn it unconsciously, without even realizing that you are ‘teaching’ them. It might seem difficult at first but it’s worth it in the long term. So, here are some ways through which you must teach them about money management.
7 ways to teach kids about the art of money management
Involve your kids in day to day expenses:
When you go to the grocery store, take them with you. Ask them which products or brands they want to buy and why. Moreover, give them a budget and notice the things that they are picking. In a fun learning way, tell them how you would buy it and why. You would be surprised to see that they will have innumerable questions for you to answer. If you think it is common sense to buy the right thing, then it must be for some people. But for others, it is not.
P.S.- If you teach them about money in a serious tone, they might think that money is a serious matter and might not come again to go to the store at all. Instead, make it a fun activity for them that they want to play again.
The high cost is not equal to high quality always:
You often find that the high cost of any product does not always imply good durability or quality. So, you can teach the same to your kids through examples. If they bring toys or say, confectionary items of their choice, compare the ones you generally bring for them and tell the difference between them. They will understand.
For instance, tell them about good substitutes for things that are cheaper but of the same quality. Say, there are different kinds of bread in the market and your child might choose the one he saw on T.V., the costly one. Familiarize them with a substitute of the same quality, but at a lesser cost.
Teach them the 60/40 rule:
You must have heard this saying, “Do not save what is left after spending, but spend what is left after saving.” Teach your kids to save more and spend less. The best way to make them practice is to start giving them pocket money. First, teach them to save 60% and spend the rest of 40% wisely. In the world of credit and debit cards, show them the real money.
P.S.- You can give them a very small amount that even if they lose it, you won’t regret it. After all, they are kids. We don’t expect them to keep money safe at such a younger age. But it is our responsibility to teach them the same.
Give them a sense of responsibility:
By talking to them about ways to spend money in our everyday lives, giving them pocket money, and taking them out at grocery shopping will make them feel a part of the family. Ask their opinion if you are buying a new T.V., or a fridge or even a tube light, it will make them feel a part of the family. This feeling inculcates a sense of responsibility and the right amount of pressure to spend the money wisely.
Let them make mistakes and learn:
You must have made a lot of mistakes in your early life. That happened was because no one taught you to handle your expenses when you needed it. However, your children are lucky to have you as their guide. So, let them commit mistakes and make them learn from those mistakes.
The main motive is to make them realize that money is important but handling them correctly is more important. Just make sure that if your children do not spend money wisely, tell them how to use it nicely for the next time, instead of not trusting them for the next time.
Why you ask? Because when you helped them learn to walk, they fell many times. However, you never stopped teaching them. Instead, you encouraged them to stand and walk again. In the same way, let your kids learn by making mistakes.
Teach them about credit money:
When your child enters the teenage stage, which is the best time when you start teaching them about credit money and money-saving options. Sometimes, adults use credit cards or borrow money from others but fail to pay the money back. So, it is always better to educate your kids about credit scores, interest, and charges at the right age. Educating them will give them an idea of how it works in real life.
This way, they wouldn’t be surprised to know about credit money as a new term. Moreover, they will take credit keeping in mind all the after-effects, and plan to pay back better.
Kids imitate you unconsciously:
‘Monkey see, monkey do’– this is something that you can relate with your kids, too. They observe you and perform regular activities in the same way. How you handle your finances is the same way your kids would handle them when they grow up. So, use money the way you want your kids to use it. You might have to change some of your ways, but it’ll be for your good. If you think about it, you will realize that the way you handle most of the things has come from your parents.
So, why not better your way to do things that your kids can follow and appreciate you later. Handling finance is a crucial thing in life that every human being requires. So, teach your kids the best way and watch them become a winner as they grow up!