Nowadays, parents seem more concerned about the politeness and good grades of their kids than teaching them the importance of saving money. Research found that parents usually wait until kids are 10 or older before having conversation to them about the importance of saving money.
Parents need to teach their children that, money really doesn’t grow on trees.
Some guidelines for teaching children the rules and rewards of good money management:
- Share the joys of saving
Children nowadays are bombarded by the most advance devices and often want to own the same expensive objects and do the same things as their friends at school. Parents should educate them the value of money by encouraging them to save their money for things they want to buy rather than just buying it for them.
- Allowance? Start young
Children will have better fundamental of financial principles, such as the exchange of goods and services for allowance, if they start to learn earlier. Children could benefit from earning an allowance, they can learn to recognize coins. But, parents need to ensure to tie allowances to tasks based on the amount the child receives on their ages and needs. For example, would they be expected to buy birthday presents for friends, school lunches, or a trip to the mall? If yes, the allowance should cover those costs.
- Start donation
Encourage children to allocate a regular portion of their earnings and income for a good purpose, such as contributions to non-profit organisations. Such gifting will be returned to them many times over in terms of the personality it builds.
- Have fun with it
Having conversation with teens, and getting them interested in proper money management, need not be all about spreadsheets and financial reports. Some parents use the classic game Monopoly or stories telling to teach children about the principles of earning, saving, and spending money.
As parents, one of the most essential lessons to teach children is how to spend and save money wisely. Through sharing financial lessons with our children starting at their young age, we can help them to understand the significance of being financially responsible.
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