You teach your kids how to count, read, and tie their shoes, but are you teaching your kids how to manage money? You may or may not subscribe to thinking this way, but money makes the world go round. Children who do not learn how to handle money may experience difficulties later in life. It can be easy to think they are too young and won’t be worrying about money anytime soon, but it is never too early to ensure your children have the tools to be financially secure as they get older. Continue reading for a few ways to introduce money management for kids.
Teach the Basics
Money habits and attitudes form before the age of seven, so it is important to begin introducing money as soon as possible. You can start by showing your children what coins and cash are. Not only should you explain the currency, but you also need to make sure they see you using the money. So, let them see you pay for things in cash and receive change in return.
You can employ a similar method with debit and credit cards. Let them know that you are using your money to make purchases. A good practice is showing your children the receipt and letting them see the total and know how much money you paid. They should begin to understand what money is all about.
Once your child understands money, they will most likely want you to spend it on their favorite toy or candy. However, you can instill the importance of saving. A fun way to get started is by having them pick out a nice piggy bank and explain how it works for saving money. It also helps, especially for younger kids, if they have a goal that they want to reach. For example, if they want a new remote-control car, they need to understand that they need to save their money to purchase the toy.
Teach Lessons on Earning and Spending
If a child is going to learn how to use money, they need to have money. This concept presents the perfect opportunity to teach your children the importance of earning money. An allowance is a great way to start teaching this lesson. Give your children chores to complete so they can earn an allowance and appreciate the value behind a dollar.
Now that they have earned their money. They are going to want to spend it. Children need to understand that money doesn’t last forever, and they should be very mindful when deciding what to spend it on. When you give them their allowance, confirm they understand that they will not receive more money and that it is up to them to implement money management to keep it.
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