Teaching your kids about money is one of the best lessons that your little ones could get. When kids learn about earning, saving, spending or giving money they will acquire the basics on how to handle financial situations later in life.
Parents should not underestimate the importance of teaching kids about money. But let’s face it: How should you address this topic to your little ones? First, let me paint a scenario for you that may sound familiar:
You and your kid are watching his or her favorite program on TV, suddenly a commercial pops up with the ultimate children’s toy or electronic gadget that has the most amazing colors and it does some cool things!!…. Then, you hear that little voice…. “mommy I want that toy…!”
Does this story sounds familiar or is it very similar to yours? …well let me tell you something… you are not alone!
Perhaps your child is so little that he or she doesn’t understand yet the meaning of money. Maybe, you’ve already had “the talk” with him or her about money … if that’s the case…great job!
In the case that you’ve never given it a thought on how to teach your kids about money, then keep reading this post.
How important is it for you to talk to your kids about money?
Think about the economic problems our generation has been struggling with for the past years. Things such as the Great Recession that started by the end of 2007 at lasted almost 3 years (some families still struggling from that) or how much debt Americans have in student loans… over one trillion!
These two major events affected and continuing to hurt many Americans financially speaking. Therefore, teaching your kids about money it is an important topic. Although, there are parents that don’t know how to do it. I highly recommend this book from Dave Ramsey. It is ideal for parents to learn how to teach their kids about money. It includes topics such as good spending habits, saving money, giving money and how to avoid debt for life!
- 15 Ideas to Save Money on Your Monthly Bills
- 7 Easy Ways to Make Extra Money Now
- 5 Things to Consider When Setting a Budget
How to teach kids about money?
There are different methods that can be implemented by parents in order to teach children the good habits about money.
The Clear Jar Method
Utilize a clear jar and explain to them that saving money in that place would give them the opportunity to buy thy special toy, bicycle or electronic gadget they want. This method will show them in a visual context how their money is “growing”. Check out this cool digital savings jar which it could be perfect for your little one!
But, remind them that when there’s no more money in their savings then their money is gone! This could make your kids more selective of when and how to utilize that money.
Allow Them to Earn Their Money
You can easily set chores or tasks around the house that can be rewarded if you child is able to do it. By teaching the value of earning that money they will have more understanding that saving money involves sacrifices as well. However, it is also good to let them know that not all things will receive payment (because they are part of the everyday chores around the house) but only those special things that will require a special effort are the ones that will get an incentive.
Be a Role Model
Kids usually learn from what they see and hear. So, in order to raise a child with good spending habits, parents should be the first example in showing them how to do it. This also will remind you that you are in charge of how your child will develop his financial skills from an early age.
Teach Them the Value of Charity
Letting your children donate part of their money to organizations or churches will let them learn how giving affects others in many ways. It will also teach them that part of their money was aimed to help people and not only to buy things.
All these methods could positively impact the notion of money in your kids. Sometimes as parents; we are too busy with work or the things that we need to do around the house such as cleaning, cooking, kid’s school projects or any other task. However, talking to your kids about the importance of money and how to handle it must come as a priority. Teaching your kids about money since early age will encourage them to develop proper spending habits later in life.
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