Money management is an essential life skill for a child. In most of the cases, children learn financial values and spending habits from their parents. In many families, financial activities are kept away from children. Some parents feel that financial activities are too complicated, so finances are not their children’s business. We all have to understand that it is not difficult for a child to learn the value of money or money management.
No child carries the necessary life skills and traits in his DNA. Parents can change the lives of their children by conveying the right financial advice in the child’s early years itself. Children’s surroundings and environment are keys to their attitude towards money later in life.
HOW TO TEACH CHILDREN ABOUT MONEY
- Lead by Example– Children like to imitate what they see, so nothing escapes their little eyes. Set a good example for your children, and they will be much more likely to follow it.
- Teach them to Save Money– Provide them a clear jar to save money they received, so when they see money increase, they feel happy.
- Establish a Spending Limit– This is a practical way for them to learn to control their spending and avoid impulse buying. You are teaching them also the difference between needs and wants, which will be beneficial during their adult life.
- Let them Manage Their Money- Allow them to make some decisions about the money they have either received or earned by working.
- Teach the Importance of Sharing– Teach them about sharing with others what they have.
TIPS ABOUT SMART MONEY MANAGEMENT–
- Provide extra income opportunities, like having a lemonade stand, pet sitting, etc.
- Encourage your child to help with family chores.
- Guide them to set goals.
- Teach your child how to be a smart consumer.
- Discuss with them about the financial decisions you are making.
- Examine your kid’s attitude towards money.
- Guide them to make a monthly budget.
- Let your kids learn from their mistakes. This might include something they later regret.
- Involve your kids in family budgeting.
- Increase your child pocket money as he/she gets older. At the same time, increase the number of responsibilities also.
- Take part in money games with your kids.
- Let your child watch or participate when you pay bills. When needed, explain the amounts.
It’s never too late to teach your kids about smart and responsible money management. Money management may or may not be taught at school. Teaching money management is the responsibility of parents. If children do not learn essential money management at home, they will most likely make bad financial decisions. Money management takes practice. It is like any other learned skill. Money is an instrument that can have a very positive effect on somebody’s life if appropriately managed, but if not, it quickly becomes a burden.
Teaching money management will serve your children well for their entire lives.