In this article, you can fine the simplest, possible methods, tips and tricks to teach your children about the value of money and how to deal with money intelligently. Whether your child is in the age of over 5 years or a teenager, this article intended to provide them standard awareness on money and learn the value of money through parents. The only requirement from the side of parent to make your kids money aware, is to involve them money related activities doing by parents at various places including home.
1. At the very first, let the child learn about what is saving. A piggy bank is more than sufficient to teach them about saving. Encourage them to deposit money in it. Let them be in love with their piggy bank and save money little by little under your supervision. One of the serious mistakes found common between parents at this point is, either they will take money from kids piggy whenever they required or they will take the whole money when piggy bank full. Remember, if you do any of this mistake at the presence of your kid, you are leading them to the hell than heaven. Never loot kids money or claim their money. Let them manage it. who knows they have any little plan with their money later?
2. Higher level of saving – Take them to the banks whenever parents visit and let them understand what all happening there. Answer each of their question wisely and allow them to deal with bank people at your presence and complete supervision. Let them do the activities of giving money or taking money from teller, putting the PIN in ATMs etc.. Make them good awareness on banks, banking and the services available there. Do not miss anything. Especially when you are taking FD’s or another saving methods, explain them the advantages and why you want to do so.
3. Teach them about investing – If you have a practice of investing in stocks and mutual funds, take your children with you. Explain to them what you are doing and why you are doing. Providing an awareness on what to do to grow money and the risks associated to each is a good idea. Encourage them to have a deep knowledge on money and investments.
4. Never blame them if they lose money or made any mistakes at the beginning. Blaming would disappoint children. Instead of blaming, inform them what happened and why it happened. Advise the methods to not happen such mistakes in the future. Always remember, children would make lots of mistakes and parent should take it as a better opportunity to teach them to not make such mistakes in the future than blindly blame kids.
5. Teach children to spend money wisely – Your activities during the shopping would certainly influence your children. If you are a hurry picker of items as soon as reaching to the shopping center, your kid also would come as a hurry picker in the future. Instead, use the best practices required while shopping like preparing lists, lokking for discounts etc.. at the presence of children. Ensure you are teach how to get best and cheap items each time.
6. Teach children about budgeting: If parents don’t have a practice of having budgets, they don’t have any option to teach their children about budgeting. Explain them the advantages of budgeting and how it comes useful to manage money intelligently. Involve children at the time of making your home budgets and encourage them to make their own budgets. Teaching your children about budgeting is one of the best gift parents can give.
7. Let your children to read statements – Reading financial statements and comparing them with the original bills is a great way to teach children on how to avoid money lose. whenever you are doing such, involve children to that. Comparing shopping bills, utility bills, credit, debt card statements, bank statements are the best time to teach children about this. Remember to give answer to all their questions and clear their doubts on the regard, patiently even though it would sometime irritate you.
8. Bring your children in financial discipline – Best option to bring your children in financial discipline is, the parents should be well disciplined first. Involve them whenever making recurring payments in each month and inform the the dates you are making various payments like utilities, credit cards etc.. Make them aware of being disciplined to make such payments in time and the result of not making payments in time such as penalties etc…
9. Money Saving tips for children – Teach them necessary money savings tips in the home itself. Wastage of electricity and how to prevent that, wastage of water and how to prevent that are some of the best practices to teach and save money. Practice possible money saving tips at the home, travel, shopping etc.. with the presence of your children and encourage them to do such as their own.
10. Appreciate them time to time with small gifts whenever they are doing right things in personal finance. Such encouragements would provide them more interest to do best things in their life to grow with money aware.
Important notes to parents:
Patience is one of the most required when teaching children about personal finance or money matters. They would ask lots of irritating questions and parents should answer them patiently and completely. Always make sure to provide the advantages and disadvantages of each action. Allow them to do small transactions, shopping at your presence and guide them to do all this well without making any mistakes.
Never blame children whenever making mistakes, instead, make them understand what mistake they have made and the impact of such mistakes and how could avoid them. Be ready to face lots of mistakes from your children at the beginning of their learning and understand that is the first step to acquire real financial wisdom.
Parents should act as the first source to get necessary money and personal finance to kids at their very early ages. That would certainly bring them in money awareness and money wise in future.
Each parents should provide then knowledge on the following points at the earliest:
– Spending vs Saving
– Wants vs Needs
– Set Financial Goals and work for that
– How to Plan to meet expenses
– How to track income and expenses
– Help to create their budget for month, quarter, half year or year
– Help to make their own savings and investing plan
– Present children books on personal finance and money managements
– Teach money saving tips