5 Easy Ways to Begin to Teach Kids About Money
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5 Easy and Basic Ways to Start the Conversation to Teach Kids About Money at Home.
It’s surprising that after all these years, schools still don’t teach kids about money skills like how to save and what a mortgage is. However, these skills seem to have stayed lost in the nether and we ourselves have the responsibility to teach our children about money.
It’s not like you have to teach kids about money issues like bankruptcy or how to Consolidate debt right away. But the point is to at least give our kids the basic skills like how to save money, how to budget, and other everyday skills.
The common tool we give to our children for saving money is a piggy bank, but actually it is much better for you to give your kids a clear hat or bottle to use instead. The reason for this is that they will be able to physically see the money they are saving. This will likely make them want to save and save more, meaning you’ll have a lot of offers for washing the car and mowing the lawn!
But being able to see the money, especially when they decide to spend it, has been proven to make people more aware of our spending. Meaning: more responsible and frugal spending.
2.Lead by example
The most important thing you can do to teach kids about money in the form of healthy financial habits is to make sure that they see you practice good money habits yourself. Kids soak up information like a sponge and they will always look to you as an example of how they should behave in life. If you spend money left right and center, your child will think this is normal. Whereas if you sit down with your child and show them where your money goes and why you save it, they will take on this information and follow your example.
3.Show them where money goes
It is important for you to teach your children that everything costs money. Rather than paying for items on your credit or debit card, show your child the cash. This way they understand the implications of spending their money and what they can buy with it. When you buy a toy for example, tell them how much it costs. It seems like a small thing to do but it can help your child understand money better.
Another great example is having them help you buy gifts, whether for birthdays (siblings, family, or friends) or holiday shopping. This can include showing a budget, and allowing them to make decisions based on how much money they have to spend.
4.Show that money is finite
Make sure that from an early age you show your child that money is not a never-ending resource. They will need to understand that if you buy one thing you may not be able to afford the other. Take them to a store and show them they have a spending limit. They will probably pick items up throughout the store and assume they can have it all. Show them how much each item costs and make sure they know that if they buy one thing, they can’t buy another. It will teach them to be able to prioritize things and make conscious decisions.
5.Pay based on work
If you want to truly teach your children about the consequences of having money, you need to be real and don’t just give them money for doing nothing at all. Money should be earned and you can teach your child the value of this by giving money based on chores they complete. If they want more money to save up for a game, they will have to work for it.
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