Money is an essential part of living and responsibilities. It’s never too early to teach your children the real value and importance of money and how to save rather than to spend.
Learning the value of money will prepare them for the rest of their lives as they will learn how to spend wisely as they grow up. The principles of handling money responsibly should give them plenty of opportunities as they get older.
Here are 8 ways to teach your child the value of money.
Start with the basics of math and currency
Once your child starts school and learns the basics of math, then it will be time to teach them about money and practice on their budget. You can play cash games at home or download educational apps that use coins or currency as they progress in the game. This way, your child will learn how to use cash and when they have enough to buy something they want.
Give them a piggy bank
This simple item will teach your child the importance of saving money and lead a sense of responsibility towards how they will handle their money. Encourage your child to keep a goal amount in a particular time frame or suggest that they collect coins whenever the opportunity is given. Keep it interesting by making it a game. On the specific date, open up the piggyback and count the savings. Create a visual record to encourage them to save money and reward them for their handling. This may also teach them the simple skills of record keeping.
Encourage them to plan how they will spend their savings
Once they’ve begun to start their savings, you can start to teach them how to prepare for their future. Planning on how to spend their savings will motivate them to achieve their saving goals and keep them motivated to save more money. You can start to observe their attitudes towards how you spend. If they want to spend more than their allowance, advise them to be patient and learn to be more frugal. Educate them with sensible shopping and explain the priorities when you do.
Shop at a farmers’ market
Taking your child a farmer’s market is an excellent way to help them understand the connection between money and produce. Let your child become involved as they help you choose the food and even hand the money to the seller. Explain how the farmer grows the food and how to sell them.
Encourage your child to make money
Not only is this an educational way to teach them the value of money, but this will also empower them and even encourage teamwork.
Give them some leeway
Give your child a dollar or two when you’re at a supermarket. Allow them to make their choices on what fruit to buy or an item of their own choosing. This will give them the experiences of making financial decisions with needs versus wants.
Give them room to make mistakes
Everyone will make mistakes as they learn. Allow your kids to make decisions and learn from them. For example, if they must have a new toy and spend their saved up allowance on it, then they won’t have money for anything else until they save up again. Allow them to experience those kinds of decisions and re-examine whether their spending decision was worth it. Allow them to have freedom to make financial decisions that will serve as an experience and lesson for the next time.
Explain the power of interest
Using specific numbers, describe how saving money will grow with interest. If you save $100 a year since the age of fourteen, you will have $23,000 by the age of 65. However, if you start saving the same amount at the age of thirty-five, you will only have $7,000 saved up.
Ultimately, the best way your child will learn the value of money and importance of saving is led by your example. Allow them to carry on with their responsibility and give them an allowance for things they find interesting. Teach them to become familiar with simple record keeping and the way a savings account works. These simple methods will help them learn how to handle money and prepare them for their life as a responsible adult.
What other ways can you teach your child the value of money? What methods have worked for you? Comment below and let us know!