In this fast pace world, everyone needs to be financially literate right from the early stages.
Of course, teaching kids about money needs a basic knowledge of money among the kids.
So, start teaching the value of money to your child as soon as they are able to count and distinguish various coins/rupees.
However, teaching kids about money and money management is one of the toughest challenges that any parent come across. Here are some tips to follow while teaching your kids about money.
Teach your kids money skills
- Giving pocket money is one of the best ways to teach about the value of money. This helps them to learn how to spend and how to save money for future purposes.
- Start giving pocket money in small amounts. Moreover, give pocket money with various coins or rupees. This helps the kid learn the value of money and the difference between each coin/rupee.
- While giving allowances to your children, offer it with some denominations for savings. This encourages the kids to save their pocket money as much as possible.
- Try to play money exchange game with the kids, whenever you feel free. Exchange huge amount of money for several small amounts.
- When talking about money, always try to use money language—purchase, spend, cost, earn, budget, save, value, price, change, coin, bank, loan, cheque, draft, cards (credit, debit, and switch), credit, debt, gain and loss.
- To teach the value of money, it is essential to set goals. With the goal-setting session, your children can not only learn their responsibilities but also understand the importance of money saving.
- Explain your children about the values of money — how to spend money wisely, most importantly how to save it, and how to increase money.
- Encourage saving pocket money by explaining the benefits of money saving and the ways of saving the pocket money for more benefits.
- Demonstrate a live example regarding the benefits of saving versus spending. Describe how they can earn interest on their savings. Pay interest on the money your kid has saved with you. This encourages the children to save more money and also help learn the interest calculations.
- Encourage your kids to maintain a record of their spending and savings.
- Explain your children how money comes in and out of your pocket. Also, teach them the difference between the needs, the wants, and the wishes.
- Make regular shopping with the kids as a means of teaching money transactions. Also, take your children along with you to your bank to make them learn how money will be deposited and withdrawn. It is a good idea to open their savings accounts by them. Doing this helps your kids learn bank transactions related to money.
- Also, explain the risks of borrowing the money and paying its interest.
Teaching children about money ensures that their financial future is going to be the best!