Money Is An Important Concept To Teach Children - Make A Point Of Involving Them From the Outset
As our children watch and emulate everything we do, our upbringing significantly impacts how we view money. Everyone in the house needs to work together to build a healthy financial mindset, through which one can teach the right concept to children.
The first step to embracing a financial literate outset starts at home. Here is how to make children financially literate and involve them in financial discussion, right from childhood.
Discuss Money Openly and Frequently as a Family
In most families, talking about money is frowned upon. The only way to get over the awkwardness of talking about money in front of the family on a regular basis is to include everyone. It's common for parents to avoid talking about money with their children because they don't want to expose them to complex topics or financial difficulties. However, these discussions don't have to be serious or frightening.
Sharing positive money stories is an easy and casual way to help your family normalize financial planning discussions. Make it a point to have a family money discussion at least once a month so that everyone has a voice and can help the family achieve its financial goals. Another great way to keep the whole family actively money-minded is to involve kids of all ages in small acts of financial decision-making in the real world.
Allowances Come in Various Shapes and Sizes
It is crucial to remember that you are the best person to decide on an allowance because you know your child best. Don't let your own childhood memories or what your peers are doing influence your decisions. First, parents should examine their own financial situation to determine how much of an allowance they can realistically provide their children. Before making a decision, think about what your child needs money for and any goals you've set with them. There is a difference in the amount if they are 5 or 13 years old.
Make sure the terms of the allowance are crystal clear once you've decided on when, why, and how much. Is it going to be tied to their behavior or their chores? Is it a requirement that the children save a certain amount of money? How about increasing their allowances and making them buy some of their own necessities for older children?
Because an allowance gives your child the opportunity to manage their own money while still having your support if they fail, it can be a powerful learning tool.
As Soon as Possible, Begin Putting Money Away
The most important financial habit to instil in children is the habit of saving. As long as you can instil in your children the habit of saving as soon as possible, it will be a no-brainer when they're ready to leave the nest. Children as young as two years old can begin saving with a simple piggy bank.
Even the youngest children can benefit from a save-spend bank, which is an engaging and simple way to teach them about saving money and doing good deeds at the same time. You should also make sure to talk to your child about how to divide up any money they receive on birthdays or monthly allowances. Finally, if you want to push your children's savings goals even further, you can have them set a goal of saving 20% of their net earnings.
There Is No Time Like the Present to Act
A lack of financial confidence or control can make parents hesitant to discuss money with their children. However, you're doing your child a disservice if you put off teaching them about money until your finances are in order.
Even if you choose not to discuss your financial decisions with your children, they will be affected by them. As a parent, it's important to be open and honest with your children about your financial decisions to understand better the power money has and how they can learn from your mistakes.
You don't have to be an expert in finance to start the conversation on money management - Just share experiences, challenges, and solutions. Rather, you must take the step forward to introduce a new dimension in your family, and help your children know the value and essentials of money. Take the wise call!