Money management skills should be taught to kids at an early age so that they spend each penny wisely. Read on and find out how to teach money management to kids.
Money is an inevitable part of human existence. Parents should consider giving lessons of money management to their children right from an early age. Fulfilling the wishes and dreams of your children at times becomes disheartening when there is a financial crisis. It is important that children learn the value of money at a tender age and inculcate skills of managing money. Yes, learning the skills of money management is no less than investment for a lifetime.
As Benjamin Franklin quoted, “Beware of little expenses; a small leak will sink a great ship.” Most parents have a hard time in saying “No” to the demands of their children. Even though you are in despair and your child heart-broken, make children understand the priorities of needful things in life. Teaching kids the art of saving money and managing finances will help your child tread the path of managing money responsibly throughout their lives. The sooner the better, as a penny saved is a penny earned.
How to Teach Kids about Money Management?
Parents can incorporate money management lessons through various aspects in their everyday life. Considering the age level, children should be involved in various activities of your routine life. The first lesson is to be an example for your children.
Ways to Teach Money Management
There are different ways to teach children about managing money. As children grow, they gradually start understanding the value of money and learn to manage money wisely. Try following these suggestions -
Save a Penny
Start a piggy bank. Children will learn to collect coins and drop them in their piggy bank. That’s how they begin to save money. Make them understand the purpose of collecting money in their piggy bank.
By giving allowances or pocket money to young children, they learn to be responsible with their money. Parents should be aware about the motive for spending money.
Children on accompanying their parents for grocery shopping get to know the prices in the market and making best deals. Teach them to compare prices and keep an account of paying for different items. As they grow they are able to independently handle money while dealing with people.
Know the Limits
Even while young children start to deal with small amount of money, parents should define limits for spending. This enables children to handle money responsibly. As children grow, they are able to deal with higher amounts.
A Firm “No”
Parents should not give in to all the demands of their children. On not doing so, children don’t realise the value of hard earned money, and their wants are never ending. A firm No may perhaps upset your child, yet teach your child the importance of prioritising necessities in life.
Teach children to share their income with others. Encourage them to spend a portion of their income for others or donate money for charity. It is an act of kindness and a good virtue. This also helps them to take up bigger responsibilities in a family.
Money tree is just an abstract, yet everybody wishes to own one. It takes great effort in saving a penny rather than spending many.
Teaching your kids money management skills is a gradual process and an aspect of everyday life. A child’s first school is his or home itself. Children get a fair picture of dealing with financial crisis in their family. Parents should make every effort in teaching children the use and misuse of money management. Good communication and timely discussions with your child channelizes for efficient management of money. Be it spending, saving or investing, children learn to consciously deal with money.
How to encourage kids to save money? How to teach money management to kids? What is the right age to start teaching money management to kids? Discuss here.
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