Money handling should be taught to children as early and as young as they are. Children need to learn the importance of money, budgeting, and saving even if they are still learning to read and write. Wise money-handling can go a long way for children especially young ones and they can be more aware of their spending and financial capability when they grow up.
If you're a parent who is not sure of how to introduce money and teach your children how to save and handle money, here are 10 tips that you can follow and apply to our children for them to be fully aware of money handling.
As early as 5 years old, you may teach your child to:
Show the cost of their favorite items
Whenever you take your child to the grocery, engage them in the market and show them how much a pack of cookies actually costs. You can also teach them money lessons if they want to buy something. Show them the actual money for them to familiarize with it.
Be an example
It is a fact that whatever parents or elders do, children will most likely follow them. Set an example and be wise enough to stay on a budget and be responsible for your expenses. This way, your children will notice your good money habits and will eventually follow your habits as well.
Use a jar to help them save
Although piggy banks still work for children who want to save up, a clear jar can also help your children save up. Since jars are clearer, they can see how much money they are earning and will motivate them to fill up the jar. They will also get to be familiar with the bills, coins, and dimes.
When they become grade-schoolers, you may now teach them:
Commissions and allowances
It is always effective for children to learn the importance of money when they earn it themselves. You may opt to pay them commissions when they do a certain task or household chore. This will also motivate them to help around the house in exchange for a dollar. In this way, children will learn that money should be earned and not just easily given to them.
Make them understand the opportunity costs
When your child wants something from the store, may it be a book or maybe a toy, always tell them what are the costs that will incur to them when they do. If they buy a toy, let them be aware that they will not have the money to buy a book anymore. This will make their minds think of which choice should they go for.
Prevent them from impulsive buys
Children tend to do impulsive decisions especially if they really want something. Remind them by asking them if the thing that they want to buy is a need or a want. Help them weigh things and decide what is the best thing to do. As a parent, it is also your duty to prevent our children from doing impulsive decisions.
When they become teenagers, you can teach them how to:
Be content
Now that teenagers have their own way of thinking and are more mature now, you can now teach them to be contented on what they have and reduce their behaviour of seeking for more, especially for expensive things. Teenagers tend to get jealous of their friends in school if they have something more awesome than they do, and you as a parent should help them understand that being contented will make you happier than buying expensive stuff.
Help them save for college
Now that they are on their way to college, whether they want to get into their dream university or they are just applying anywhere near, teenagers need to be more responsible with their expenses because college is no joke. You can encourage them to find part-time jobs that would help them save up for themselves when they graduate from high school.
Help them do their budget
With their allowance, help them do their budget and train them to save up as much as possible. You may encourage them to bring food for lunch from home to school so that they don't have to buy food, or simply walk home if they can instead of riding public transportation.
Help them be responsible for their money
Although it is still a parent's job to be responsible with all the finances in the household, you can teach your teenagers to be responsible for their own money by letting them figure their money out. This includes how they use it and how they should save.
