How to make your kids master of money management ?
3 min Read
Financial Management is an important subject that all kids should learn from an early age. It is essential that children know the value of money and how to make it as they grow up. Negligence of financial understanding could lead them to face serious money management problems in future.
Warren Buffet, a legendary investor, teaches kids about financial responsibility through his own experiences. From the age of 6, he did chores around the neighborhood for a nickel. His dad was smart enough to have taught him about money and savings at an early age. You may want know how.......
Tips to make your child Financially responsible:
Buffet says, a common mistake among parents is that they do not talk to their children about financial matters at a young age. They think the child wouldn’t be able to understand. What they fail to see it that, children are very impressionable, so you teach them something from a young age and they never forget it. This is also part of good parenting. Time is essential when it comes to the matter of finance, the earlier you start educating your kids, you are helping them create a better future for themselves.
Teaching your child to be resourceful is the next important tip. Encourage them to think outside the box and come up with creative ideas. Urge them to think critically and join them in their imaginative adventures. Help them turn trash into treasure, this will help stimulate their minds and also teach them important lessons. Your child will be able to think resourcefully, and also work productively around the household. They will also be inclined to save money.
To help them understand the idea of saving money better, you can assign them activities to do around the house. Give them small chores, like cleaning their room, making their bed, so on. If they do their task well, put money in a jar set up for them. Seeing the money earned will be a motivating factor for them to do more tasks. Ask them what their goal is and what they would like to do with the money. This would be the perfect opportunity for you to teach them about spending and saving money.
Differentiating between price and value is a struggle that even adults face. For example, you bought a shirt from a store and you paid way more than what you anticipated. You feel more guilty when you see the same shirt being sold at a lower price in another store. The idea behind this is to educate our kids to understand the influence advertisement and sales have on products.
To help your child, make a list of household things you need. Before purchase ask your kids to help scour the newspaper and shopping sites for the best prices. The process will influence your kids and it creates for a bonding moment.
Teaching your children about making the right financial decisions is the last tip on the list. It is a choice between essential and non-essential. We need to prioritize our necessities and spend money accordingly. Educating them on how they need to take important decisions in life is key to living a financially secure life. Give them alternate choices, if, for example, they ask you to buy a Play Station, ask them if they really needed to buy it, or would they rather save that money and rent it. Small exercises like these will help them get a clear idea of what they want and what they need as they grow up.
“A penny saved is a penny earned”,Ben Franklin
As part of good parenting, it is never too early to teach about maintaining a healthy financial habit. Discuss with them about the financial mistakes you might have made, and educate them on the value of saving. This will help your child grow into an independent and responsible individual.