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You are here : home > Raising Children > Raising Smart Children > Teaching Children the Importance of Money

Teaching Children the Importance of Money

Teaching Children the Importance of Money

Have you taught your child the importance of money? Understanding the importance and management of money at an early age will prove beneficial for the future life of child. Read on to know some tips to help children learn importance of money.

Making children understand the importance of money is a very important responsibility of parents. Once children understand the importance of money they can make wise decisions relating to money matters in their prospective life. Therefore, it is very critical to make children understand the importance of money at the right time. Such maturity amongst them relating to money matters will definitely help them achieve more in life.

Today’s parents aim at providing each and every facility to their child. As such the child may not be aware about the financial difficulties which are faced by parents. Therefore, it is very essential for parents to make children understand the importance of money. If they learn to respect money at the right age, they will definitely grow-up as wise human beings. Here is how you can teach children the importance of money.

Day-to-Day Expenses

Make children aware about how you manage the day-to-day expenses. It is necessary for them to know that from where money comes and where it goes. Make sure that your children understand that you do a lot of hard work to win bread to your family with which day-to-day expenses are taken care of. Also tell your children that you need to do proper planning to manage day-to-day expenses. If you give pocket money to your children ask them to keep a record of how they have spent it.

Involvement in Decision Making

When you decide to spend money on a holiday for your family or you are buying any gadget or gizmo for your house, involve your children also. Let them know how you planned to earn and save money to buy such things for your family. Tell them your budget for buying a particular thing for your family. Make sure that they understand that money should not be spent out of the budget. 

Importance of Saving Money

Let your children know how saving money has helped you in your life. Tell them that saving money is critical as it helps in times of difficulties. Teach them to make small adjustments so that they can save money and use it when required. Ask your children to maintain a piggy bank and save money out of the pocket money. Reward them when the piggy bank is full.

You can also teach them to make small savings. They can make small saving by avoiding using bus when they have to travel for a very short distance. Instead of spending money on bus fare they can go walking.

Importance of Proper Investment

Just like adults do, children should also learn how to make proper investment of the saved money. If your children are forcing you to buy an expensive toy or gift, you can ask them to save money and buy it by on their own. If they are confused regarding what to buy out of the saved money, you can guide them. You can suggest them to buy good books rather than buying toys. You can invest their money in child insurance plans along with your money. This will make them feel that the saved money has been invested in right manner.

Avoiding Irrelevant Expenses

You should teach them to avoid irrelevant expenses. You should tell them how you avoid irrelevant expenses. For example; you can tell them that having extra cheese in your burger requires extra money whereas if you do not put extra cheese you can still fulfil your hunger. Similarly, when we can make use of one pen and can reuse it by refilling it, there is no need to buy extra pens.

Many times, at the end of each academic year we can find many note books which are not used completely. Children can make use of such notebooks as rough books for rough work or can make rough notebooks out of the remaining pages. In this way lot of money can be saved by avoiding irrelevant expenses.

Follow What You Teach

You should follow what you ask your children to do. After all children always look up to their parents and behave accordingly. Therefore, it is very necessary that you too give importance to money so that your children will also follow you. At the same time try to help them imbibe a thought in their minds that money should be earned only through hard work.

Hard Work and Money

Children should not be forced to do anything. Parents should try carry out activities which will automatically generate a sense of importance for money in them. Parents should give pocket money to their children when they help them in the household chores. They can give them pocket money when they take part in cleaning the house or helping mother in kitchen. In this way children can associate money with hard work. Any person automatically starts giving importance to money when he earns it with his own hard work. 

In this way carrying out the above mentioned activities will help you teach your child the importance of money. If they understand the importance of money at an early age, they will have a very bright future. They can take proper decisions regarding savings and investments and will learn to achieve more in life.

Does your child use a piggy bank? Do you encourage your child to save money? Have you taught your child the importance of money?
Discuss here.

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Nishita.3 years ago
nice article
Payal.5 years ago
I usually give some allowance to my son for a week. He has the habit of saving and usually saves half of whatever we give him. He will use his saved money to buy books or maybe candy as he pleases :). He would never compel us to spend extra money for his needs. After seeing this habit my friend has started giving some allowance to her daughter and now she is in process of teaching her daughter the importance of money.
prasanthi.5 years ago
I do give my money to my kids as pocket money when then perform good in there school activities and in there studies.i learn them how to save there pocket money and i will teach them how to spend on there things.
Saini.6 years ago
I do give my kids extra rewards in the form of pocket money whenever they achieve something. My son scored a good mark in the class test happened at Orchids The International School in Bangalore.
Sonali Pradhan.6 years ago
Very true - Also its never to late to teach children the importance of money and its value. We have a unique program designed to cater to this need of parents. For details check
Sanina Khan.6 years ago
quite true!If kids are never given any money, they will never learn to manage it.An allowance helps them to experience what it's like to have money. they will think twice on how to spend it and thus will also decide to put some away for later use.
Ravi Debey.6 years ago
I give my kids an allowance and this is for a specific period say a month or a week. They have to use this money for their basic necessities and also save something from it. this way they will learn about saving also.
Rohini Sawant.6 years ago
Teaching your children about money, can be a fun experience and a very valuable lesson.Teaching starts when they are young enough to count and teaching by example is the best way to go
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