At a time when many parents are preoccupied with home schooling their children, it may also be an opportune time to discuss financial matters. A chance not just to do school chores, but set them up for life in general. Let’s look at some ways to teach your kids about money.
What does a small child need to know about money, any way? Well, the answer is that it is not key to their immediate future. However, they are already taking on board how the world works. Learning about money should be part of that. It is a vital life lesson for later. Studies suggest that children can understand the basic concept of money by the age of 3. And grasp money habits by the age of 7.
Games are an excellent method to introduce money to your children. Not only can it help their maths, but it can also assist them in comprehend the concept of paying for goods. Try role playing buying and selling items with toys for very young kids. For older children, try to have them involved when going to a shop. Explain how much items cost and where the money is coming from to pay for stuff.
The old adage goes that money does not grow on trees. With few exceptions, most families have a specific and limited amount of money that they can spend at any given time. That means money runs out. Occasionally, or often, you have to save to buy what you want. Also, sometimes you need to borrow money to pay for bier items or to cover an emergency.
These are important lessons for children to learn. No one has unlimited access to funds. However, if there is something you really want or need, one solution is to save up for it. Planning ahead is key, and it is good to set goals in this way. If you give your kids pocket money, you can encourage them to save up using a piggy bank for toys, books, or other items that they want to buy later. Count the money together as it grows. This demonstrates how contributing a little bit over time adds up.
Cash and coins are rapidly becoming a thing of the past. Of course, they still have monetary value. But the digital age is reaching younger and younger children and people are not interacting with paper money or coins nearly as often as previous generations.
Many parents are opening bank accounts for their children to manage gifts and savings. This can be a great learning opportunity for older children to learn how bank accounts work and that money is saved there to be used later. If you plan on letting your children use money from their bank account at some point, consider having a separate account for off-limits savings such as for college or university tuition. That way there is a clear distinction (also for you as parents) for how money will be used.
Too often parents will give in to a child’s last-minute whims at a shop checkout. Be it sweets or chocolate or pop. Or put themselves in a position where they have to negotiate or compromise on what to buy. Why is this? Other than wanting to get kids to eat healthier foods instead of sugar and processed items, it is often that we recognise this as an expense nobody needs.
When talking to kids, always be very clear as to the reasons why you are unable to buy an item. The alternative is that you allow them the opportunity to use their pocket money for last-minute shopping and explain how much money it will be. Count together how much money is left after the purchase. Take your own lead on this and limit those “treats”, no matter how small.