7 Lessons Your Child Should Learn About Money
Teach your child the value of saving and spending wisely. It is never too early to learn about how to budget and save money. Early education about money will prepare your child in their future financial life.
Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend.
7 valuable lessons you can teach your kids about money:
1. Give them control of money. I suggest giving your kids a set amout of money on a regular basis, for example $5 per week, and let them decide how they will spend it. The result will either be they’ll be spending too much on unimportant stuff or they will save it and cut back on other areas. In this way, you are helping your child to develop their own decision making skills thus they will learn to be responsible for themselves.
2. Teach them that reducing expenses makes goals come faster. Tell them that if they spend less on trivial things, they be able to buy the big things they want sooner.
3. Teach them to save and to give. You can give your kids for example, $5 every week. A good rule of thumb is to save 10% and to give %10. If you are religious, giving 10% in tithing is an excellent example. Show them how their savings can increase with time and that the more they save, the greater the increase. For example, demonstrate how $1 per week will grow. $4 in a month then $52 in a year!
4. Keep good records of money saved. You can create a bulletin board at home where your kids can see the improvement of their savings. In that way, they’ll be more excited to save more for they can see how their savings grow. Saving for a goal can also be helpful. Post a photo of something they desire to achieve with their savings to help keep them motivated.
5. Alert your kids to the dangers of borrowing and paying interest. If you charge interest on small loans you make to them, they will learn quickly how expensive it is to rent someone else’s money for a specified period of time.
6. Teach them about advertising and consumerism. Show your kids how to evaluate TV, radio, and print ads for products. Teach them that not all products on sale are always the best buys. Teach them the value of quality over quantity.
7. Establish a regular schedule for family discussions about finances. This is especially helpful to younger children–it can be the time when they tote up their savings and receive interest. Other topics should include the difference between cash, checks, and credit cards; wise spending habits; how to avoid the use of credit; and the advantages of saving and investment growth.
These tips can help your children build their interest in saving money, teach them how to spend money wisely, and show them the advantage of budgeting for their future financial growth.
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