How To Teach Young Children About Money So It Sticks With Them – Part 1
posted on Oct 14, 2020 | 324 likes
How financially literate are your children?
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If you don’t teach your children how to manage money, somebody else will. And that’s not a risk you want to take!
“Money doesn’t grow on trees.”
This is the nugget of wisdom that so many of us were handed as children, and often the financial literacy education ended there. A new survey by CreditsCard.com found that one in four U.S adults with children under 18 said their parents provided no money lessons as a child.
We may not have that kind of structured data here in Nigeria, but you can imagine what the result will be if such research is carried out.
In the case of money matters, ignorance is not bliss, and what you don’t know can hurt you.
In this post, we’ll show you how to give your children the head start you wish you had and set them up to win with money at any age.
Explain Where The Money Comes From
When you’re teaching your kids about money, it’s important to teach them where it comes from. They need to know that money does not just come from mom and dad’s wallet.
Teach them that when you work, you get paid, when you don’t you don’t get paid.
The key is to repeatedly demonstrate and demystify the relationship between work and money.
Preach The Three Principles: Giving, Saving And Spending
Once you’ve established that money comes from work, it’s time to teach your children the three basic principles when it comes to money — giving, saving and spending.
Giving is one of the most important of the three categories because you’re teaching them to feel the impact of helping others at a young age. That’s invaluable.
As for saving and spending, encourage your child to set aside some of their money to savings and some to spending each time they get paid.
Remind them that once their money is gone, it’s gone. And yes, your children will make mistakes, but it’s better that they make those mistakes under the safety of your roof.
Have Your Child Physically Organize Cash With Three Piggy Banks
Children need tangible ways to understand abstract concepts, so it’s important to not just explain these three money principles, but give them concrete tools to practice them.
Instead of just having one piggy bank for your child, get three, and label one ‘spend,’ one ‘save,’ and one ‘give’.
Any time your child gets money — allowance, payment for completing a task, birthday money, etc., — encourage them to split the money up between all three banks.
The key to this being educational is to allow your child to choose how they split the money, as well as what they do with it – while teaching them the ideal ways to spilt funds into these categories.
This exercise is not only helpful in getting kids confident in money matters, it provides an opportunity for parents to have meaningful conversations with their kids about money management.
Part 1 Conclusion
Teaching your children about money at any stage is going to take time on your part. It won’t always be easy. But if you want your children to know how to successfully manage their money when they get older, taking the time now will be worth it.
These ideas often require changes and modifications in the way you think and use your own money, but the price is well worth it.
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