Have you ever wished you had learned more about saving money when you were younger?
The earlier children are introduced to financial responsibility the better. According to studies, kids who develop good money management skills turn out to be more prepared as they face financial challenges as adults.
Giving them the right foundation as children will help them to form good money habits. It also helps improve their critical thinking skills. They will understand better the value of money and why they have to find a way to save instead of just always splurging.
As they grow older, they will surely thank you for what you have done! (Eventually!)
The infographic below outlines 9 ways to teach kids to manage money...
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9 Ways To Teach Kids To Manage Money
Use A Clear Jar Instead Of A Piggy Bank To Save Money
You might have already taught your kids to save money using a piggy bank. Try using a clear jar instead so they can see the increase in their savings by the day. It will become a fun game they look forward to!
Be A Good Example
There is no point in teaching them how to save money if you can’t do the same thing. Whether you are at a grocery store or dining in a restaurant, you have to show to them that you are thrifty and you don’t just spend money on unnecessary expenses.
Let Them Understand The Meaning Of Prices
It helps if you show how much it would cost to buy certain items. In doing so, they will understand which items are expensive and which are not. Along the way, they will learn which of these items are worth the money.
Teach The Concept Of Opportunity Cost
Opportunity cost is what you have to sacrifice if you are choosing one over the other. For instance, if they really want a new pair of shoes, you can tell them that you would have to cancel your trip to the museum in order to get them.
Instead Of Giving Allowance, Let Them Earn What They Get
For teenagers, it is important that they start to understand the concept of work. This means that instead of just giving them money, you let them do household chores first. They can only earn what they need for school if they work hard for it.
Open A Bank Account For Your Teenager
If you have a teenager, you can take things a notch higher by opening a bank account. This will allow them to use money wisely. Tell them that once their bank account dries up, you won’t just automatically refill it.
Let Them Work A Summer Job
If they are old enough to work during the summer break (even winter break), help them find one. This will teach them the value of having a job and working hard for whatever they want to buy.
Get Them Involved In Budgeting
You do plenty of budgeting at home. Next time, ask your kids to sit next to you and explain to them why you are spending money for certain items. They can also give suggestions just to make them feel more involved.
Explain The Value Of Giving
Teaching kids about money management is not just about saving money. It should also be about learning how to give. Ask them to pick a charity where a portion of their savings can be donated.