How many times have you heard people complain that children these days have to value for money? Have you ever wondered if we as parents may be the ones responsible for this attitude? After all, it is our responsibility as parents to teach our children about money matters. Good money habits stay with you all your life if you start young. So, don’t wait till it is too late. Teach these 10 money lessons to your kids today so that they can be responsible adults tomorrow.
ATMs are not an unlimited source
Many of us visit ATMs with our kids. When they see money coming out of this wonder machine at the click of few buttons, it gives them an impression that ATMs are an unlimited source of funds. Explain the concept of bank and ATM to them. Tell them that you work to save money, and that bank is just a place where you keep your money to keep it safe.
Managing allowance money
If you want your children to learn, how to handle money, give them an allowance. If they spend it all quickly, don’t give them more. They need to learn the consequences of overspending. Ask them to wait for their next allowance until the end of the month. Just be patient, they will not make the same mistake again.
Teach your children to save
If your son wants the latest action figure, tell him to save for it. Once he has saved enough, take him shopping. Let him pay for the toy himself. This will teach him a valuable lesson that you have to work towards a goal patiently. He too will feel great about making the payment himself.
Reward your kids for saving
Teach them the value of saving by rewarding them. You can set a time frame for your kids to save. But if they do not spend their money until that time, reward them with a treat. This will teach the value of saving and the interest you can earn on saving.
Track your spending
Teach your kids to track their spending by noting down all their expenditures in a notebook. Not only will this help keep track of what they have spent on, but they will also realise where they could have saved.
Teach kids to prioritise
Children usually have a long list of thing that they must have. Ask them to make a wish list in a notebook. Tell them to prioritise – the things they want the most go first and so on. This way they can work on one goal at a time and save for it.
Teach kids to be smart spenders
Children are often unaware of the concept of sales and online discounts. A toy they have just bought from a store in a mall can cost substantially less online. Teach them to be informed about deals and check the prices online and then go for the best alternative.
Sharing is caring
Teach your children to save a portion of their allowance to share with the poor. This will teach them that they can use their money for the welfare of others as well.
Be a good example
Children often emulate the habits of their parents. So, unless you lead by example, you cannot hope to have children with good financial habits. Don’t make impulsive purchases if you don’t want your kids to do the same. If you have given your child a piggy bank or savings jar, buy one for yourself as well. This will teach your child that savings are essential at all ages.
Many parents are reluctant about talking to their kids about money. They feel it is not a subject for children to deal with. It is, in fact, essential to speak with them about money. ‘Are we rich?’ If your child stumps you with this question, don’t just brush him off with a vague answer. Sit down with him and discuss the importance or earning, spending wisely and saving for the future. Discuss the difference between needs and wants?
Tell your children to ask three questions before they buy a thing:
- Do I need it?
- Do I afford it?
- Can I do without it?
Teach them about money now so that they are smart about money matters later in life.
It is never too early to start teaching your children about money. Understanding the value of money and learning good financial habits will help them later in life. Teaching our children to save, budget and plan for the future is one of the most important life lessons that we can impart. Children who learn money management in their childhood will manage their finances well later in life.