Here’s How You Can Teach Your Child to Be Financially Responsible
You can never be too early to train your little one on the nuances of finances. It is essential to help your child understand how money works, how to manage their money, and why they should start saving.
The problem with most parenting styles is that they keep money conversations away from the children. It thus leads the child to believe that they are entitled to everything they fancy, and saving is not necessary. So, here are a few easy ways to teach your child about money.
Talk about money
If you leave money as a taboo topic that’s off the discussion table, they will learn to believe that money isn’t something they should be concerned about. They will grow up to keeping a distance from all money-related discussions in their future relationships too. It will thus bring in a huge problem and be a hindrance to their saving plans. Therefore, it is crucial for you, as a parent, to talk to your child about money and ways to handle it.
Most kids never know their parents’ income, budget, savings, or how much things cost. While it is too early for your child to worry about money or be able to do something, there is no harm in letting them know. They will understand where the family stands, how you plan expenses, and how saving is a part of your life.
Lead by example
If you are splurging and impulse buying all the time while preaching to your little one about saving money, that will never happen. Kids learn from what they see rather than from what they hear. So, always lead by example. Teach them how you split your earnings by dividing money into multiple portions like essentials, savings, and then the rest of it.
This will not just teach them to save money, but will also teach about financial planning. Give real-life scenarios and talk to them in terms of numbers and expenses that will make sense to their little mind.
At a time of a pandemic like now, it will be immensely helpful in teaching valuable lessons to your child. If your child sees you spending on more things than you need, they’re likely to grow up doing the same. So, make sure you are careful about the way you talk about money around your children.
Have a savings jar
A see-through jar with pennies and dollars will be an excellent motivation for your child to save. While you can get your child to start saving using a piggy bank, the traditional way, the see-through jar serves as an additional motivation.
The fact that your child can see the amount of money they have saved and how it’s increasing with every additional contribution they make will motivate them to make more money and save more. A little bit of extrinsic motivation goes a long way in getting your child to develop positive habits.
Help them earn
Another great way to teach your child to learn about money and saving is by helping them earn. Instead of giving them allowances every week or month, tie it to a chore as a pay. This will keep your child more willing to the chores and be more responsible with the money.
They will understand that they will have to earn money, and it will not just be given to them. And as the few dollars in their pocket came after a considerable amount of hard work, they’re more likely going to be saving it than spending it on their impulsive needs. You can also teach them to save up for their needs, prepare a budget, and buy their gifts instead of you having to get it for them.
This will teach kids about prioritizing wants over needs, saving money to get what they want, etc. For instance, if your little one wants a toy car and an action figure, tell them how much each of it costs, ask them how much they have in savings. Help them figure out what they want to buy and how much more they will have to save. This will teach them to handle money better than any boring lecture ever can.
Get started early on the money discussion, teach your child to be responsible with their finances. It’s easier than you think if you start soon!
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