Interestingly, our schools do not find it necessary to educate students about the value of money, given how important it is for people to learn to make everyday spending decisions carefully for their future. Look at the way half of our population is in debts or mortgage loans. The reason, not always, is due to the financial hindrance; mostly it is due to wrong spending decisions or by impulsive spending. Money gives us independence and opportunity to take financial decisions. It clearly shows, if given power, how responsibly we would act or vice versa. Owing to the lack of formal training at schools, children primarily learn about money and finances related information by observing adults at home. Children learn from your attitude towards financial planning or investment decisions. As a parent, it is our responsibility to make our children understand the value of money, and motivate and empower them to be regular savers or investors. It is our job to make them understand how to spend responsibly on the things that they need. Let us readout some fun tips to cultivate a respect for money in your children:
- Tip 1 –Introduce them to money and make them practice as soon as they start knowing math.
Once your child starts learning mathematics in school and begins performing simple calculations, it is time to introduce money to them. You may play interesting money games with them. There are myriad online games that you may play on the computer or on iPad with them. In this manner, they can slowly comprehend how money actually works in real life.
- Tip 2 – Teach them the value of savings by getting them a piggybank.
This is an age-old method that still holds true. Giving them a piggy bank and the sole right to maintain it gives them a sense of responsibility towards managing their own finances wisely. It also makes them realize how savings are important in real life. Encourage them to keep updating it from time to time. You may also keep it interesting by keeping a day in a month for counting the total savings.
- Tip3 – Take your kids to an actual bank and open their savings account.
Once they reach 1st or 2nd grade, it is the appropriate time to open a savings account for them. You can ask them to accompany you to the bank and show them how it really works. As they grow older, educate them with the terms and conditions and show how to operate it online.
- Tip 4 – Show them how to invest and plan for savings. Also, guide them to spend their savings responsibly and at the right places.
By letting them plan on their expenses beforehand will motivate them to save more. When you show and inspire them to spend their money wisely at the right places, they are encouraged to save big. Also, it will make them responsible as they realize that they can buy useful stuff with the properly managed money.
- Tip 5 – Make them understand the flipside of credit cards and how to maintain a balance.
We know it is too soon to educate them about credit cards; however, you may always inform them about the flipside of such attractions. As we all know, credit cards are a big temptation, which sometimes makes you overspend and then later regret. Teach your child patience while spending money, and refrain from any instinctive overspendings. The best way is to lead by example. Like maintaining healthy habits, maintaining proper management of funds and finances is also learned, especially when children are still young. When you give them the monthly allowance or pocket money, you are familiarizing them with ‘money’. With it, you also need to make sure they understand its value, learn record keeping, save a little, and realize that mindful spending goes a long way. These skills will make them handle funds responsibly in their later lives as well. If you have more such tips for parents, kindly share with us.