5 Ways To Teach Your Kids About Money
Imparting financial knowledge is important to help your children achieve long-term success. Teaching kids how to make important financial decisions, including saving strategies and money-management skills, can shape their future attitude towards money. Here are some simple strategies to consider
The Transparent Jar
Make the kids use a clear jar to collect money so they get a clear visual of their money growing. Because visuals are a helpful learning tool, experts suggest that children use a clear jar instead of a piggy bank.
Play games like Monopoly or The Game of Life as a family. Games like Monopoly, can make learning about about finance easy and fun for kids as they learn valuable information that can help them make wise financial decisions. For example, Monopoly teaches kids that Cash is King and not to put all your eggs in one basket and diversify your investments.
Talk About Money to Kids
Talk to kids about the full cycle of money, right from how it is earned by working to how it is saved and spent. When you go shopping, explain to your kids the different forms in which you pay for the goods and services. They will always think that the goods are free unless you explain to them that you are paying money for the goods with the card. Help them to pay from their jar to buy stuff, this action will make them realise how hardly earned money is being spent.
Don't Give Allowances, Give Commissions
Help kids understand that money is earned and not just given to them. Don't give them daily/monthly allowances to spend, pay them commissions for chores like cleaning their room, taking out trash, or other activities.
Wait and Avoid Impulse Buys Encourage your child to wait at least a day before they purchase anything above $10. It is similar to saving tips for adults, where you wait for 30 days before you make a major purchase. It will make them think whether they really want to spend their saved money on the particular item.
If you don't teach your kids how to manage money, someone else will. Teach them how to win with money at any age.