Teaching your kids good money management should be one of the top priorities any parent should have. But when is the best time to start teaching your child about finances? And how should you go about doing it? Most financial pros agree starting as soon as possible is the best. There are various methods you can use to make sure they understand how important money management can be.
Here are 4 tips to get you started.
The Counting Game
When you take your children to the grocery store with you or while going out for other errands, make sure they understand the real value of money through a simple counting game. Have them count out aloud the price of an object to help them better understand the real value, and that most objects aren’t simply free (or that money can’t be easily replaced!). However, they should know that not everything has a monetary value such as family time, playing with their friends, and so on.
A Better Allowance System
Apart from knowing the value of money, your child should also know how hard work helps them earn money. While most children get an allowance for their work, most of them don’t really have to work for it. Make sure their allowance is tied to accomplishing chores around the house.
Always Encourage Saving
Teach them about the importance of saving their money. Create goals, such as saving up to help with a summer vacation or rewarding them with a night of ice cream when they save a certain amount of money and don’t spend it.
Figuring out Wants and Needs
When they have a savings, it is also good to teach your child that some of the money can be spent on wants and needs. Show them the difference between a need (groceries) compared to a want (brand new toy) and how to properly purchase items without going broke.