Yvette Salvaris
Teaching your kids about finances is a gradual process that requires persistence and patience. It starts as early as preschool age when kids first witness the buying and selling of items for money.
By this stage, children need to understand four basic concepts:
-Money comes from work; it doesn’t just magically appear in your bank account.
-Stuff costs money.
-You have to wait before you can have something new; saving up is the key to getting things sooner than later!
-Giving back to others is important because it helps us all feel good about ourselves.
As a parent, you hold the key to unlocking your child’s financial potential. Lead by example, and show your kids the importance of smart money management by practicing it yourself.
Get creative with your teaching methods and let your kids get hands-on with their financial education. A great example is a transparent glass jar where your child can watch their savings grow. It is important to teach them that this is how you save.
Kids should be taught that things in life cost money. Encourage them to save for an item and then take the cash from their money jar to go buy that item. Start with a small low-cost item and gradually build up to a more expensive item.
It is crucially important for kids to learn that money is earned. Teach them that money actually does not grow on trees and that earning is a difficult but fulfilling process. Get ch8ildren to earn money by doing different things. Encourage them to help adults or even set up their own little business. Make earning fun and exciting so that they can see their money grow as they participate in activities that help them to earn.
By the time they reach their teen and early-adult years, you should have already laid the foundation for financial literacy by teaching them about budgeting and the importance of saving for important things like education. But now is also an ideal time to take it one step further: by teaching them how to manage their own bank account.
This will give them real-world experience with managing their own money—and teach them that they can’t always have what they want (or even need). It will also give them practice in making healthy choices with their money, which will help them make better decisions about how to spend it later in life.
One of the biggest challenges with teaching kids about money is that they want to spend it. It’s a fact of life. And while we’re not saying that you should never give your kids money to spend on whatever they want, we do think it’s important for them to learn how to manage their money and make healthy choices about what they buy.
That means that when you do decide to give your kids some spending money, try to keep it small—like $5 or $10—and make sure there are rules around how they can use it. You could dictate that it has to be saved up for something bigger (like a new toy), or you could tell them that it can only be used for certain things (like food or clothing).
As parents, we want our kids to be financially independent and successful when they grow up. The best way to do that is by instilling good financial habits in them at an early age. Teaching kids about finances is not an easy task but with the right approach, you can help your child become financially literate and responsible later on in life..
