Money tips for kids
When it comes to saving, age doesn’t matter. In fact, financial literacy is important not only for you, but also for your children. That’s because the sooner kids start learning about money, the better prepared they will be as adults in handling their finances. Just like brushing their teeth, saving is a habit that can be instilled, and the younger your children are, the more receptive they will be. But just how do you start teaching your kids how to save?
Five ways to teach your child about money
Create goals that are age-appropriate
The best lessons in the world are useless if your child doesn’t understand them. That’s why you have to ensure that your methods are age-appropriate. Try talking to younger children about goal setting and spending choices, and get them to practice by saving up for a small toy or a favourite treat. As they mature, introduce more detailed concepts and discuss saving goals such as smartphones or the latest gadgets. It would also be good to open a savings account and engage them in fun money discussions.
Offer saving rewards
Just like banks offer interest when we save, you can do the same for your child. That way, they will feel motivated to save just to receive a reward. For younger children, the reward could be in the form of stickers, a new toy or whatever motivates your child. As your child grows older, you could match their savings. You can also offer more attractive rewards the longer they save. In time, they’ll develop good saving habits.
Make it fun
It can be difficult to fully explain the concept of money management to your child. That’s why the easiest way to teach them is by making it fun. There are a number of games available to teach financial concepts to children such as Monopoly and The Game of Life. Through these games, your child will gradually learn how to make financial decisions that can be applied in their daily lives.
Allow them to make mistakes
Sometimes the best way to learn is from your mistakes. It’s good to let your child learn his lesson when he is young and the financial loss won’t be so great. If your child makes a frivolous purchase, spends his savings and comes to you for money, don’t just hand it over. Instead, use it as a teaching opportunity and let them learn that there are financial consequences to bad spending decisions.
Set a good example
Children very often pick up your habits, so it’s going to be hard for them to be smart about their money if you’re bad at managing money yourself. You need to lead by example. Educate yourself about personal finance so you can pass those lessons on to your children. The best thing to do is let your child see that you are saving money and making smart financial decisions too.
By constantly reinforcing these tips, your child will soon develop a healthy understanding of money management and good financial habits that will enable them to make smart financial decisions in future.