This is an article “Teaching Your Kids About Money Today” by Marc Primo
Even if data is now considered to be the most valuable commodity, money is still the number one tool in the world when it comes down to commerce. Allowing your children to learn how to manage money in their pockets at a young age will certainly give them an upper hand in their adult lives, plus the necessary knowledge to navigate the complex world of finance with ease and confidence. But you should know—teaching them the ‘how’s’ may not be as simple as it seems.
Most couples out there are struggling to manage their own finances, let alone teach their young ones the value of being frugal and the discipline of acquiring savings. However, for those who have long practiced well-organized plans and efficient ways to save money will certainly find it easier to impart their ‘know-hows’ to the kiddos.
Here are a few tips you can try straight from various parent experts on how to teach kids about money:
Teach them the value of an allowance
There have been various debates about just how much money we should give our kids for their weekly allowances. Is a dollar enough for your five-year old or should you trust him to make good use of two?
Depending on how much you can really spare for their weekly pocket money, allowances will always be the first form of interaction your kids will have when it comes to money management. Help them make a budget of their own by splitting the dollar for food, treats, toys, and more importantly, savings then let them know that there are ways to increase what they get weekly if they know where to look or what to do.
Establish a reward system in the household
One way you can teach them to earn more money while being productive at the same time is by establishing a reward approach when it comes to doing the chores. This way, you also get to save on both energy and money by engaging the young ones in taking care of the household tasks like washing the dishes, taking out the trash, or cleaning their room. Not only are you able to teach them the value of hard work, but also the importance of chipping in on all the essential housework.
Allowances and earnings are two different things and you should also define them properly. Allowance money won’t last forever but if you can teach them how to do good work for well-earned bucks, they will soon realize which jobs are worth taking and how they can set a fair value for their abilities as professionals.
Encourage them to save
Kids will always have a hard time drawing a line between their wants and needs, with the former winning over the latter most of the time. Encouraging them to put a slice of their allowance or hard-earned money into their piggy banks so that they’ll have more for rainy days will teach them the real value of money.
Draw them a scenario wherein they will realize that saving up for a new lemonade stall for the summer season may earn them more money than saving up for a one-time purchase of a new gaming console. Help them lay out realistic financial goals on paper and check how they are doing from time to time. If you have more spare, do provide a small interest that compensates their patience. That way, they can see that saving up has its own merits as well!
When their money is substantial enough to be deposited in the bank, open an account for them and gradually guide them on how the whole system works. Letting your children appreciate the ins and outs of the financial industry at a young age will give them better insights on how to handle money especially these days when cyber currencies have become a real thing. First, teach them value, then the best practices on keeping their savings healthy, and then introduce them to the lucrative world of investments. Once they reach adulthood, there’s no doubt they’ll thank you for all of it!