“Money is a stand-in for many of the values we want to teach our children” – Janet Bodnar
That’s why you should impart important money lessons to your little one right from the tender age! Trust me, this will help the kid to spend money wisely all the time.
If you see today, many people are living paycheck to paycheck in our country! And one of the major reasons is they don’t know how to manage money.
I feel that people should have basic financial knowledge right from their childhood. And especially, more schools should include financial literacy in their curriculum! Besides, being a parent, you should also teach your child the value of money! After all, kids do pick up good and bad habits from their parents only!
Here we have listed some of the best possible ways to teach your child the value of money! And help them to manage finances well throughout life!
Let’s start!
Introduce your little ones to the coins
Most likely, a coin will seem like a metal button with inscriptions all over! But slowly the kid will start to identify the coins. You can buy a pretend store toy to demonstrate how money is used to buy things!
Give pocket money to the kid
The baby steps to teach your child the basics of money management is giving them pocket! You can start giving a small allowance to your child to purchase something.
But firstly, make the kid understand how he/she is getting the money. How often is the kid going to get that allowance? I would advise you to give pocket money to your child once a month. This will help the kid to get a rough idea about paydays too!
Make your child understand that he/she should save money to buy things. And if the kid spends all of them in one go, he/she has to wait for the next month!
Gift a piggy bank to your child
Perhaps, the best way to impart financial education to your child is by gifting a piggy bank! By doing so, they can start saving for themselves! Besides, he/she can have a visual idea of saving money.
So, ask your little one to deposit small amounts of pocket savings into the piggy bank! Like I said in the earlier point, the kid can save money to buy something he/she really wants to! But make sure that thing is not too expensive!
Else, it might take a long time to save money to buy that. And in the meantime, the kid can get frustrated.
Let the kid save and buy that stuff. This way he/she can understand the importance of saving money to attain goals!
Make the kid understand that “money” doesn’t grow on trees
Yes, you heard it right! Make your preschooler child understand how can you earn money. Talk about the job you and your spouse are doing.
This way, the preschooler can get a concept about the value of pocket savings. And to understand to take care of his/her belongings.
Include the kid in your small financial decisions
Let’s say, you have gone with your child to a supermarket. As obvious as it is, the kid will feel joyous after seeing a ton of products!
Give your child some amount, say $5, to make his/her choice of buying stuff. The kid must be willing to buy whatever he/she likes with that money.
“Do we really need this?”… ask this question to your child. In the first instance, probably he/she might say yes! But you need to be patient and make him/her understand.
The kid might take some time to realize whether or not it’s a necessary thing to buy! This way, they will learn not to overspend and focus only on basic expenses!
Familiarize your kids with banks
Take your child to the bank. Introduce the kid to the cash counter, teller, etc. This way, the kid can know what happens in a bank.
Plus, take your child to the ATM to withdraw cash. But they might think that it’s a printing press where you get free money. You need to explain that you have saved your money in the bank. And an ATM is just a convenient way to withdraw your saved money!
By the way, why don’t you open a savings account for your child?
Yes, you heard it right! But you or your spouse have to be the co-owner of the account until the child attains the age of 18.
Doing so, the kid can earn interest by depositing money. This will encourage the kid to make regular deposits and earn more interest!
Having their own bank accounts can give a feeling of achievement to your child and motivate the kid to save more!
Try to pay in cash
No doubt, credit cards are convenient to use. You can spend money when you don’t have any. But you may have to shell out more to use this privilege!
The kid might think that he/she can buy anything just by swiping the card. So, whenever you go shopping with your kid, try to pay in cash. Doing so, you can make your child understand that the best way to buy something is with the money in your pocket.
Besides, explain to your child that it’s not good to spend more than earnings. It can result in falling prey to the debt trap! If the kid really wants anything, he/she should save for it!
The bottom line is, you have to be responsible while teaching the value of money to your child! Because the kids follow the footsteps of their parents!
So, be patient and support your child. And impart some important money lessons to the kid for a bright future ahead!
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I like most of these except the paying in cash. I get the idea, but I get cashback when I use my credit cards. I think it might be more important to explain to them that it’s not a “magic card” and you have to pay it off. Maybe instead show them what a credit card bill looks like so they see that you still have to pay it.
Definitely true– i think it is good for kids to learn how to use cash and what it means but times are different, maybe learning to know how to use a credit card could be a good thing to teach kiddos too.
Hi Diana! Well, you can swipe your credit cards in case you don’t want to lose those attractive reward points. But make your child understand that it’s not free money. You have to pay off the outstanding balance amount after the end of the billing cycle and preferably within the due date. Otherwise, the kid may get a wrong idea that he/she can buy anything just by swiping that card. And if possible, while paying off your outstanding balance amount, sit with your child. You can show him/her how credit cards work and how you are making the payment.
This is definitely a great point. Credit cards can easily be thought about as free money!
all great tips.. and we are now thinking of the bank account for them (At least my older one)
That is great!
Great tips . Giving a piggy banks and getting to know the bank are my favorite ones
Definitely — then they look forward to earning money.
Well, gifting your child a piggy bank is the baby step to teach the kid about saving money. If possible, gift your child a transparent piggy bank. It will provide a visual representation of the saving process. And the kid might feel encouraged to save more.
This is a really good idea!
It is good to start teaching kids early so that they can learn skills about saving money. I think sometimes too you have to let kids make mistakes to learn good lessons (e.g. overspend on something so that they realize the value).
Also true— learning from making mistakes is key.
Yes, of course! It’s good to learn from mistakes. But being a parent, you have to make the kid understand where did he/she do mistake! Don’t blame the child for the mistake.
Agreed Valentina!
I completely agree with everything in this post! It is so so important to teach children from a young age what money is and how it is earned and used. My girls are slowly learning and it is one of the most important life lessons they could learn!
www.savingmovingmummy.com
Definitely agree with you on that.
Thanks! Yes, you should teach your child the value of money right from the tender age! It will help the kid in the long run!
Agreed! This will totally help them!
We started giving the kids pocket money – one now refuses to spend on anything because she doesnt want to waste her money :-p The other one is buying gems on his games!!!
LOL That is perfect!