We are bred to desire everything right now.
The instinct makes sense in infants. The last thing you want, though, is to raise a kid that can’t learn to control their want for instant fulfillment. After all, doing that will likely result in tantrums during shopping trips and later-life financial problems.
How therefore can you teach kids that when they tap their card at the grocery store, they aren’t actually performing some kind of mystical, magical transaction?
Talking about money every day is essential for teaching young children how it functions. The optimal time to begin is before age eight.
Why 8? According to a well referenced Cambridge University research, by the age of 7, financial habits are usually quite well established.
To put it another way, by the time your child enters the third grade, they have undoubtedly developed some ideas about money. As a result, it’s a good idea to start talking to them about money when they’re still a preschooler or kindergartner.
Regrettably, most families don’t spend the necessary time explaining to their children how money is earned, saved, spent, and budgeted. We want children to be worry-free, and we mean this sincerely. We therefore protect them.
But, it is wrong to protect them from the truth about how money actually functions. These are some suggestions for how to teach your kid crucial financial ideas in a lighthearted manner that won’t overwhelm them:
SEEK OUT OPPORTUNITIES TO DISCUSS MONEY NEEDS VS. WANT
Do you wear a conventional watch rather than a smartwatch? To your children, explain why. Youngsters occasionally fail to distinguish between wants and needs. Talking about something like choosing one option over another enables kids to understand the distinction.
You may, for instance, donate to a certain charity by reducing some unnecessary spending.
In order to have more money to donate to the food bank and assist those who are less fortunate, it is a good idea to explain to your child why you are choosing the less costly cereal.
ASSIST CHILDREN IN VISUALIZING HOW MONEY WORKS
Present ten $1 bills to your child. Finally, discuss how you might spend that cash. You may spend $5 on two coffee mugs. Alternatively you might purchase ten soup cans.
Discuss how to share the funds with your children.
This inspires them to gain a deeper comprehension of how to manage money. Your children’s suggestions for how to maximize those ten dollars may surprise you.
Read Also: 7 Effective Ways to Save on Car Insurance
MAKE SAVING MONEY A FAMILY HABIT
Your children will be able to observe how money can increase whether you open an online savings account or store spare change in a large jar. You could wish to give up some of your own expensive routines, like having lunch out with coworkers every day, to demonstrate how money might rise more quickly.
You can each cheer when a dollar or quarter is added to your funds. You can occasionally use your funds to treat yourself to something special, like a meal at your preferred restaurant. This once more demonstrates that it can be worthwhile to wait for something.
ON YOUR CHILD’S FIFTH (OR NEXT) BIRTHDAY, START AN ALLOWANCE.
I firmly believe that giving children an allowance can help them learn about money. Inform your youngster they will receive $5 every Saturday when they turn five.
The only warning? You’ll sit down with them and work with them to decide if the money should go to the bank, a charitable organization, etc.
Over time, you might want to increase the allowance by adding further chores on top of those that are not included in the stipend.
This gives your kids a greater understanding of what you mean when you say that you are paid for your labor since it enables them to see how money might be generated.
KEEP TEACHING FINANCIAL MANAGEMENT
Your kids will be able to handle further financial knowledge as they get older. Consider borrowing as an example. Several online calculators demonstrate the consequences of not making your credit card payments on time.
Unfortunately, college students frequently find themselves in debt because they are unaware of the potential consequences of their credit card usage.
Your children will learn to control their impulses and their finances if you teach them early on about the dangers of careless spending.
Your youngster will eventually become an adult. Knowing that you prioritized having financial conversations early in life will ease your anxiety when that time comes.
Read Also: 5 Challenges for a Stronger Financial Future