How to Teach Children About Money
Money Management Mar 18, 2020
Managing your finance is still a struggle for some adults. That’s why it is important to teach children about money and its value at an early stage. It might seem like a daunting task, but with proper supervision and practice, your kids can learn to make intelligent money choices.
Making children aware of how money works will make them more inclined to practice healthy spending habits. Financial education isn’t limited to any age group. Teach them the basics and watch it guide them on their path to financial independence. Here’s how you can teach them about money.
Introduce them to the concept
The first step in teaching kids about money is to develop their knowledge of how it works. Let them know and understand everything they want has a price. Show them how money earned is used to acquire things. This would rid them of the illusion that money grows on trees.
Payment for services
Make your kids understand money can only be earned through hard work. This is done by rewarding them when they get their chores done, or perform excellently in school. Also, explain how you afford nice things. Discuss your profession with them. This way, they learn money is earned, and it would help develop their work ethic.
Teaching them to be satisfied with what they have can prevent them from splurging on things they don’t need. Developing self-control when it comes to our finances can save us from bad money decisions. When they do start earning, they would manage their funds better because they’ve learned to curb impulses.
Practicing this concept and showing them how, would help kids better understand the benefits of saving. If they can’t afford to pay for something they want now, they have the option to save up to eventually pay for it. And even better, purchase something they didn’t know they’ll want or need from their savings.
Be an example
Children are quick learners, they pick up habits from what they see. If you want them to learn the value of money, practice healthy spending habits when they are with you. Take them along when shopping for groceries. Don’t buy everything they ask for. If they want something, explain to them the importance of having a budget and sticking to it.
With allowances, children get to have practical experience in handling money. By giving them allowances, they will either learn to rationalize what they have or end up spending it all. This experience will better highlight the downside of improper planning and overspending.
Monopoly can be a fun way to teach children about the concept of money. This practical experience can be used as a lesson on spending and the value of money. Playing money games can help them practice and improve the way they handle money.
Encouraging giving will teach children not to be self-centered. By giving from the little they have, they learn to be more aware of others in need and be more charitable.