Finance plays an essential part in everybody’s lives and aids many vital decisions. Money has its own role to play in a child’s life and has different significance in an adult’s life.
As a parent, you can teach your children the importance of money and present them with the art of money management. This will help them, in the long run, to manage their finances and sort their lives in terms of money.
Some parents may feel that teaching your child about money will unnecessarily burden them.
On the contrary, teaching your children about money will empower them to lead their lives on their terms and make their financial decisions. So make your child aware of the financial knowledge as soon as possible.
You can always lead by example. To make your child responsible, you have to act yourself responsibly in front of your children as they imitate you in every possible way.
Children construct their worldview as per your views and also grasp everything that you present them with. If you keep on worrying about money in front of them, they are likely to carry forward this concept unknowingly into their adulthood.
If you borrow loans in front of them and pay them back on time, they will learn the exact attributes. You can present your children with good future financial advice that there are taking loans for people on benefits available in the market that may attract them, but it is important to weigh their needs and then get into debt.
According to research, children form their own opinions and views on everything as early as the age of seven. They are observant of everything you do. Hence, it is critical to mind your actions and thoughts in front of your children.
Piggy banks are the traditional way of saving money, but they are opaque, so they do not give a visual understanding of their savings. They do not help children to know where their money is actually stored.
Instead, you can use a container that is transparent and made of glass. This will be a treat for your child to watch their money getting saved and impact their minds in a good way. They will be excited to save their money and can see how their money grows. This will motivate them to save more money.
2. Along with pocket money, pay them for the completed chores.
You may be giving pocket money to your children, but what is it teaching them about money?
You can make motivate them by paying them whenever they complete a household chore efficiently. This will make them realize that money is earned and not just given.
3. Let them learn from their mistakes.
Many parents do not let children make mistakes and correct them before making any mistake. The important part is to learn from the mistake and not repeat it.
If they spent their whole money buying chips and then spending their entire weekend being broke, let them do it for once. You have to make them understand not to repeat this.
Once they have done, they will learn from their own experience and never repeat the same mistake. Giving them the liberty to make mistakes will help them weigh the alternative options and make their own decisions.
If your children spend their entire money, you can make them learn by giving them a small amount loan that is just like loans without a guarantor. Your children have to pay this loan once they receive their next pocket money.
4. Discourage them for impulsive buying
Children may be lured with a new blingy thing in the market. They can be deceptively attracted to it for the moment and may make an impulsive buy.
They may not understand at the moment how to capitalize on their finances. As parents, you have to make them realize and discouraging them from impulsive buying.
Tell your child that the toy will be available for days to come home and think about it, whether they need it or just the spur of the moment. This will help your child to set their financial priorities.
5. Open a savings account.
Once your child is old enough to understand different concepts about money, introduce the savings account concept to them.
Make them understand that not all the money can be seen and touched. Introduce them to the concept of banking and showing them how it works. Demonstrate it through example, and it will be easier for them to understand.
6. Make them learn about charity.
Empathy is an essential trait that every human being should have. You have to teach your child about financial as well as emotional literacy.
This will make them empathetic towards other human beings in the long run. Make them understand with real-life examples. Show them the impact of money on someone’s life by helping people.
This will make them understand the real importance of money and also imbibe qualities like sympathy and empathy.
Once you introduce the concept of money to your child, they will have a greater understanding of the role of finance in the real world. It will make them be responsible for their finances. Hence, it is essential to teach your children the importance of money at a young age.