Given how important financial skills are to navigate life, you should teach your kids important financial lessons. Showing children the basics such as budgeting, spending, and saving is significant to their personal growth. Money skills should be developed from an early age and fostered into young adulthood.
Teaching kids about money has never been more substantial in modern times. Our new way of trading, in accordance with credit cards, online shopping, and internet banking, causes kids to seldom see the use of physical money, like notes and coins.
Not seeing a tangible commodity for trading makes it harder for kids to get their heads around the concept of money. They might see this “invisible things” as unlimited resource, an abstract rather than a valuable.
First, the kids have to learn where money comes from. They have to wonder why Dad or Mum go to work everyday. Make them realise people get a job and earn money to support the family.
Waiting is also a good concept in discussing hard-earned dollars. Set their allowance as example. If they receive theirs in a weekly basis, they have to wait a number of days before they get hold of their allowance. It gives a sense of importance to wait, of being patient, and to save.
Speaking of hard-earned money, you can reward the kids monetarily after they’re done with chores. This way, they grasp the idea of income and paycheck — which is applicable in their adult life, so they won’t bum about and wait for money to land on their lap.
Label two jars “Saving” and “Spending.” Whenever your kids receive money for allowance or doing chores, divide it between the jars equally. The spending jar is for small purchases , like candy or knickknack. The saving jar is for more expensive and important items. They’ll be more sensible on what to buy first and learn to allocate money and create a budget.
Kids act as either owner or buyer when they play store. This game not only enhances their imagination, it also helps in understanding the basics of commerce by exchanging play money for items.
Put the play money in clear jars. Every time they spend, they see their jar dries up, while the store owner’s accumulates.
It’ll give the kids idea on how to prioritise needs than wants, based on their savings. Discuss the difference between the two and encourage your children to think about this before spending.How To Teach Kids The Concept Of Money? Click To Tweet
Help your kids to set a goal and track their savings and spending. Say you’re in a toy store. Let the kids choose which toy to buy after they’d saved for this one.
It’ll make the kids motivated as they have something to buy in the future. Teach them how to discern by comparing price tags and size to make for a wise purchase. To encourage them more, show them a photo of the toys and remind them constantly of their choice.
The next step, once the kids have a goal in mind, is stashing their cash in a safe place. Piggy bank may be enough for younger ones, but for young teens, you can set them up with their own savings account at the bank. This way, they can see how their savings are adding up and how much progress they’re making toward their goal.
Mapping out how much the kids need gives them a clear idea and helps to reach their goal. They’re more likely to stay on track and continue saving when they have a specific target.
There’s never a wrong time to teach kids how to save and put some cash back into their pocket. Saving money is a habit that can take time to build, but practice makes perfect.
Before heading to the supermarket, teach the kids how to make a shopping list. Explain to them that having a list avoids impulse buys or unplanned purchases.
One of best ways to save money is to take advantage of coupons, deals, and vouchers. Ask your kids to help you clip coupons. At the store, make them give the coupons to the cashier and to keep an eye out for the products. This will make the kids feel like their helping, and it’s an easy and fun way to talk about saving money.
You can also teach kids that when their savings won’t suffice during an emergency, they can borrow money from a financial institution. Now, it’s important to point out that they only do this when really necessary.
Explain to them that to apply for a loan, even for short term loans or emergency cash loans, comes with tremendous responsibility. They have to be of the right age and it’s advisable to borrow only as much as they can afford to repay.
With Pretty Penny, you can apply for loans online at any time from any New Zealand location. PPL’s application procedure is different from procedures normally used by banks and other financial institutions. Once approved, money is transferred into your bank account and repayments are withdrawn automatically.
If you’re a parent, making saving a regular part of your kid’s routine can lay the foundation for a bright financial future.