Essential Financial Lessons for Kids
As a parent, you are your child’s first and most enduring teacher. The example you set, the lessons you teach, and the instruction you neglect will live in your child’s psyche forever. And, that includes how to handle money. Help your kids develop good money habits now and throughout their lives with the following financial lessons.
Save, spend, and share
Financial literacy is an ongoing conversation, and it should start at an early age. Start with the basics — rattling coins in a piggy bank. A clear piggy bank can allow your kids to see their money amount grow before their eyes. This is their first foray into saving.
As they get older, and are eager to start spending their coins, introduce them to the save, spend, and share concept. They can divide their money into these categories, which allow them to save for the future, purchase an item they want right now, and then put some money aside to help others.
Working hard pays off
No matter what store you and your child go into, they will want you to buy them something. And, most likely, you’ll spend most of the time shopping saying no to the cavalcade of items they present to you, increasing your blood pressure and your child’s whining. Instead of losing your cool or cutting your shopping trip short, use the opportunity to teach a lesson about the value of a dollar. Have them do a chore or task in exchange for the item they want so they learn that items come at a cost.
Doing chores to earn money for a toy takes time. Kids are notoriously impatient, so you need to help them construct a budget so they can see it’s possible to earn their reward. Learning the basics of budgeting and the importance of setting a goal are lessons that will serve them well now and throughout their lives.
By having them work for an item, they will learn to appreciate the value of it and spend their hard-earned money more wisely. Simple budgeting charts are a great start to teaching your kids about planning future purchases.
Making money a regular topic of conversation with your child will help them grow into finance-savvy people. From toddlerhood to adulthood, you can help your kid understand the value of hard work, saving, and setting and reaching their financial goals.