Here are 11 ways that will help you to make your kids learn some important financial lessons.
#1 Discuss about “Why money?”:
Your kids must know “what is money?” and “why is money?”, not only how it looks, but what it do practically in life? and how will it help, if it is saved for future. Ask some very innocent questions to your kids like “Are we rich?“, “I have spent my money, can I borrow from you some?” “From where can I get money?”, “How should I earn more?” let them think and find out the answers later you sharel the value of money and your stories of struggle when you don’t have money. Tell them the comfort, the happiness and basic needs of life are fulfilled by money only, and saving it for future helps us in financial crisis.
#2 Differentiate between Desires and Basic Needs in life:
Have a conversation with your Kid about analyzing wants and needs, tell them that needs include the basics, such as food, shelter and clothing, education, and wants are all the extra materialistic things that we wish just for the sake of… extra comfort or may be show off sometimes. Ask them to make a list of all they things they want, now you help them to exclude all the extra wants that is not important and can be removed from list or can be replaced with some other economic thing, this is how your kid will learn to differentiate between desire and needs. You can involve your kids in grocery shopping, street shopping to illustrate how wants should take a back seat to needs in terms of spending.
#3 Let your Kid earn Money:
You don’t need to send your kid for a job, here it means just assign small task to your kid and give them a fixed regular payment for their work or services. Assigning task and giving wages will help them to realize importance and handwork behind any hard earned money. If you want your children to become savers, give them opportunity to learn how to use it.
#4 Gift them a Piggy Bank:
In market you may find many attractive “piggy bank” toys, gift one to your kid now. Tell your kids that the they have to fill up the piggy bank with dollars and coins, until there is no room. Depending upon the size of piggy bank set a goal to earn money and fill the piggy bank weekly or monthly. Illustrate that the piggy bank is for saving money for the future and that the more they save, the more their money will grow, and they can utilize that huge amount in buying some huge thing in future.
#5 Set Goal to buy something:
Let your kid involve in buying things for himself. For example if your kid want a “teddy” you can set a goal to save money for it. Make sure it’s not so pricey that they won’t be able to afford it for months. Then it just gets frustrating If your child does have an expensive goal, come up with a matching program to help her reach it in a reasonable time frame. Setting a limiting will them to learn patience and time are needed to make money grow.
#6 Help them to keep patience:
If your kid developed a habit of counting coins regularly, its a sign that he is taking interest and enjoying saving money. But if it is too frequent, then it show, your kid is getting impatience. Help you kid, every time he adds money to the savings jar, help he count up how much he has, talk with he about how much he needs to reach he goal, and when he will reach it. They will learn importance of waiting and being patient.
All those behaviors are really fun for kids. And it gives them a sense of the stability and confidence.
#7 Create Saving Jars to set Priority:
Kids get easily influence with surroundings, what they saw then want it, so your kid might have number of desires. Your kid may want latest toys, bicycle or anything in fashion. Here the idea is to prepare jars for your kids for their each desire, let them make choice which desire is most important and should be fulfilled first, ask them to fill Jars accordingly. This activity will help them to take decision and prioritize things. To encourage saving up for their short-term goals, put a picture of their desired toy or item on the jar, so they have a visual reminder of what they are working towards.
#8 Reward young children’s money saving efforts:
It’s natural that children may lose interest in saving their money or become frustrated when they want to buy something straight away without having enough saved. You could encourage them to continue saving by agreeing to match the amount they have saved for a couple of weeks to help them reach their goal by giving some incentives or in terms of reward.
#9 Lead By Example
Children learn by example, As i told you what they around then get influenced so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly. When you’re out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another. Explain them about bargaining, discount like terms so that they get familiar with market terms.
#10 Keep it fun:
Involving kids in some household budgeting decisions is the best way to give them live experience . For example, when planning your next family day out give your children the opportunity to be involved in choosing where to go. Try to limit the choice to two or three different places. Give them the total amount you have available to spend and discuss the pros and cons of each, weighing up the cost involved and the importance of prioritizing what is most important to them. When on the trip give each child a small amount of money to budget and spend themselves.
#11 Open Up a Bank Account
Once the piggy bank is full, take your child to the bank to open up a savings account for them. Have them count how much money is going to be deposited, so they can have a physical understanding of how much money they have. Show them the final number and reinforce the idea of interest.
It can provide a great source of motivation for your kids if they understand that their money will grow over time as long as they don’t touch it.
Here is standard chart shown below from kindergarten to 12th standard:
#Compare sources of personal income and compensation.
#Analyze cost and benefits of credit.
#Develop a plan for spending and saving.
# Recognize the responsibilities associated with personal financial decision.