Kids quickly learn about their favorite chocolates and candies, but what if you could teach them what it takes to buy them?
Teaching the importance of hard-earned dollars might seem impossible, but it’s not complicated. All you need to do is follow the tips given below and help your youngsters understand the concept of personal finance.
Give Them Pocket Money
Start by giving them a small sum as their allowance. Your child might spend all their money, and then they might want to buy something else, so they’ll ask you for more. This is a chance for you to teach them how to balance wants and needs without going over the budget. Instead of giving them the money, encourage them to start saving more.
Just like you have a savings goal, your child can have a savings goal too. You can start with something as small as 5% savings each month. You can put it forward as a challenge and review their progress at the end of each month. You can also enroll them in community banking schemes such as Earn While You Learn Program to take it a step further.
Take Them Along On Shopping Trips
Ask your child to accompany you to the supermarket when you’re there to stock up on your weekly groceries. When they decide to buy something, help them evaluate if they need to make that purchase or can they do without it for the time being. You can also help them look for a cheaper option and teach the concept of comparison shopping.
Put Them In Touch With Reality
As adults, we know how manipulative most television commercials can be, but children don’t. The jingles and the visuals easily woo them. Help them understand that what they see isn’t the complete picture. As kids are too naive to understand the marketing nuances, help them see through such manipulative tactics.
For example, they may show a toy car flying in the sky with wings for extra effects. Your kid may think the car flies in real life too. Help them understand they no matter how many cars they buy, none of them will fly. Instead, tell them how they can realistically play with that car.
Discuss Your Strategy
If your child is old enough for an allowance, they’re old enough to understand how you make your financial decisions. Try discussing your saving strategy with them. You can include information about how you are saving for their education or building an emergency fund.
Organize Money-Related Meetings
At the end of every month, you can fix a date and time and sit down with your children to talk about money. During this chat, all family members can discuss their savings and spending for the previous month. It’s a good chance to appreciate your child for their attempt at saving.
Lead By Example
This one sounds obvious, but it can have a huge impact on how your child approaches their finances. If you exhibit yourself as a sensible parent who carefully weighs the pros and cons before making any purchase, your child will likely follow in your footsteps. If you keep your finances organized while making room for little splurges once in a while, your child is sure to learn the balance.
Give Them Small Jobs
There’s no harm in letting your child earn some money at home. Maybe during summertime when the schools are closed, you can assign household chores such as cleaning the garage or raking the garden in exchange for money. If they’re old enough, they can also get a summer job. This will help them understand that money comes with hard work and should be valued immensely.
Over to You
Teaching the value of savings to your kids helps them become financially aware adults. Money matters aren’t often taught in school, so you must make sure that you’re providing them with adequate knowledge about money at home.