Money management for kids must be taught at an early age. Have you seen kids who always insist on buying the latest toys and gizmos? Or kids who who make a huge fuss at supermarkets for buying everything they see? Well, some parents may argue that they are financially well off and there is no harm in pampering kids and meeting their demands and so on, as it keeps them happy. But have you heard of the saying “Give a man a fish and he will eat for a day, teach a man to fish and he will eat for a lifetime” The same goes for kids.
Now the next question would be, “How do I teach my kids money management?” The answer to this is not akin to studying rocket science, you just need loads of common sense.
Money Management Tips For Kids
Start At The Right Age
The best age to start teaching kids about money is from 5yrs-6yrs onwards. Smaller children are likely to accidentally swallow coins. So you need to be very careful.
Get A Piggy Bank
First and foremost, you need to buy an interesting money bank for your child. It may be a small toy house, you keep a coin at the doorstep, the door opens and a dog collects the coin before closing the door. The coin gets collected at the bottom of the toy house. Kids have short attention spans. The more interesting you make things for them, the more they will be keen on accomplishing tasks.
Teach Kids The Value Of Money
Next you have to tell them the reason behind parents going to work. They have to understand that you have to pay money for food, school fees, household expenses, petrol etc. Tell them nicely that people have to work and only then do they get paid.
Introduce kids to coins first. Encourage them to put coins in the piggy bank. Also make sure it is locked. You can tell your child that it will be opened on the first day of every month. This also inculcates some discipline in the child.
Play Money Games
Make them notice when you pay for groceries at the local grocery store. Show your kids that you have allocated a budget for groceries and you are going to spend within the limits. Any loose change that you get after paying for groceries can be given to the child as savings meant to be put into the piggy bank. Introduce role plays for money games like monopoly.
Teach Kids To Save
Encourage teens to go for summer jobs. For instance, if they want a trendy new bicycle, they can use their salary to get it and you may even chip in some more money if needed. This will inculcate self-esteem in the child, in addition to learning how to save.
A rule of the thumb is to teach a child to set goals for saving money.You need to explain the actual cost of a toy that he may want, for instance, and the rate at which he needs to save and the time after which he can take money out of the piggy bank to buy that thing. Put up a money tree on the notice board in your kid’s study. For every penny saved, put up a coin sticker on its branches. You may even put up stickers on money worksheets.
Start Off With A Monthly Allowance
All said and done, you can begin by giving a monthly allowance for your child. Initially, make sure you are present when he spends the money. Advise him on the quality of the product he is buying. Teach him to understand if he is spending wisely on the right product. Let him not spend the entire money, you see, the purpose of this exercise is to make him save. So that has to be kept in mind.
As your kid grows, you can explain the concepts of debit cards, credit cards, ATMs, aspects of financial management and more.
Now you have something to start with. So go ahead and teach your kids the proper tricks of money management. And remember, this is a long process, you have to be there for kids to guide them on money matters till they are mature enough to take their own decisions.
Photo Credits – kenteegardin