Have you ever asked yourself some of the ways how you can teach your child the value of money? It is absolutely a thrill seeing a child save. If individuals cannot save even a small amount, they may have lacked financial discipline from childhood. As we all know, money is an essential thing that helps us run our economy.
Therefore, teaching children the value of money while they are still in their childhood opens up their minds on how to manage their funds. It makes them understand the value of money while growing, which may help them secure a stable financial future in adulthood. Here are some simple ways to teach your kids about monetary values.
Open A Bank or Saving Account for Them
Any parent who values his or her child will not hesitate to open a bank or even a savings account for his child immediately after he attains the age of 7. This will enable a child to know the importance of saving and also how interests accumulate (Investopedia). Therefore, opening a bank account in your child’s name is one way to teach your child the value of money and the importance of having a financial backup. Please encourage your children to learn how to manage savings accounts before handing them over to them. Your child grows up knowing he or she has to manage the funds if they wish to be financially stable.
Give Them A Helping Hand Towards Independence
As your children get into adulthood, they will start thinking of leaving the family and begin to live alone. They start making financial decisions based on their emotions. As a parent, you still have to hold them and guide them in their choices, so they don’t make mistakes. Alternatively, you can cater for some expenses like paying household bills, council tax, TV license fee, or even rent. However, please do not take the most significant part of the bill and teach on how to prioritize their expenses. Tell them you will not always be there for them, and let them learn to live independently. Giving your children financial independence opens their minds about strategizing their spending.
Building Trust with Teenagers
Teenagers should be included in conversations about household finances and how they make financial decisions. Most teenagers hear their parents arguing about finances more than they see how the issues are worked out. Most adults wish they had learned more about money management when they were teenagers. Therefore, include your children in the fundamental household financial decision to let them know about family matters at a tender age. A good example is giving your children a small amount of money for family shopping, like fruits and vegetables. This is the right time for you to start talking to your children so they may not regret it later.
Emphasis on Patience
An average child starts to comprehend the concept of waiting between the age of three and five. This is the perfect time to teach your kid about the importance of patience when it comes to money matters. For example, promise them a computer and tell them to wait for one month. Since good spending habits are supported by how patient someone can be, children learning the significance of patience will be capable of controlling their spending desires. First, start with little life hacks, for example, taking your children to a playground and letting them wait in line to use a swing or slide. Explain to them that learning to wait for their needs is also part of life.
Get Them A Simple Budget
Drafting a simple budget is a vital way to teach children the importance of spending what they have, no matter how small it is. Teenagers should also be taught the importance of planning for money before they spend it. This will help them to use their income reasonably.
Enlighten Them on Both Sides of Credit Cards
Most people would use credit cards without knowing their dangers. Do we call them risks or opposing sides? Besides credit companies giving financial support during an emergency, overreliance on credit facilities will likely pin down debts for the rest of your life. The good news is that once your child turns 18 years, they will be old enough to sign up for a credit card, and credit companies will likely seduce them early in college. You have to teach them both the bright and dark sides of using credit cards so that they don’t fall into traps and start their adulthood in massive debts. First, tell them that they should only use credit cards if they can settle the debt within a month. Stress this by using concrete figures to show them how interest builds up quickly if they partially pay off their credits. Secondly, teach them to use credit cards for emergencies only.
Stress the Significance of Sharing
When chatting with your child about the value of money, don’t leave out the importance of sharing. For instance, BusyKid outlines a list of charities your child can donate to. At the same time, Goalsetter elaborates on three ways kids can categorize their goals, and sharing is part of the plans. Therefore, teach them that sharing what they have to someone doesn’t make them low forever. Make sure your teenagers learn about the importance of giving. They can pick a charity, church, or even someone they know who needs a little help from them. This will help them understand why giving doesn’t only affect the people they give to but the giver too.
Give Your Child A Piggy Bank
You should teach your child how to start saving by using a clear jar to save. Although saving doesn’t give a child a clear vision, using a transparent jar enables them to see money growing each day. As a parent, help them develop a long-term goal such as video games, expensive toys, bicycles, or stationary. Remind them daily or weekly to save for the item and earn money in a reasonable timeframe. This tactic will help them drop lousy spending habits and focus on growing their savings.
The Bottom Line
As financial experts put it, there are no perfect ways to teach your kids about the value of money. You are painting the big picture of the importance of saving and good spending habits. Children growing up with money knowledge from their parents are likely to be successful in the future no matter how little they earn. Therefore, please allow them to learn about these secrets while they still have time.