Teaching the Value of Money to Your Child- How and How Soon?
Make sure your child knows that money doesn't grow on plants and you need to earn them with hard work, in his early years.
Teaching the value of money to your child is a long process. You need to start discussing this topic right from his early childhood. This lesson is important for children, as it will help them to have a secure financial future.
For example, if your child loves to buy costly toys almost every day, stop allowing him to throw a fit. Instead, enroll him into different kids' activities online classes like Yellow Class. These will keep him involved in different hobbies for kids.
The cognitive skills to count money start developing from five to six years and it is the perfect time to make them understand how to count money, collect changes and find the price of different items.
Here is how you can teach your child the value of money.
Teach them how to use money.
You can buy 3 jars, for saving, spending, and giving. This gives them a clear idea about how to use money, how much to save and how much to spend.
When they are trying to save up money, set some goals. For example, ask him to pay for his online hobby classes. This will help them to figure out how much money I need to save and for what duration.
Give them a small allowance every month.
Young kids need money to buy their favorite cookies, cards, chocolates, whereas teenagers love to buy their clothes, cosmetics and lots more. Therefore you can give them a little allowance every month and ask them to save the money instead of wasting it unnecessarily.
Help your child to earn more.
You can stick a hobbies list on the fridge and ask your child to complete them one by one. Make sure you are paying for each job they are doing. This will help them learn that money is earned out of hard work.
Allow your child to spend some money.
Let him go to a grocery shop and purchase his favorite biscuit. This will help him to count the right amount of money for the item he is purchasing. Make sure he is good at mathematics so that he can ask for change or pay up more if required.
Teach them to help the needy.
Asking to save up some money from his monthly allowance and help the one who needs it. This will make him a good social creature and will create a healthy spending habit.
Make him understand the difference between paying with cash and credit.
Teach your child that buying a toy with credit is much more costly than buying with cash. For this, you can lend him some money on credit with a promissory note that includes a due date for payment. And add interest if not paid on time. This will give him a clear concept of purchasing with credit.
As a parent, it is your responsibility to teach your kids that earning money is not an easy thing. This means he needs to know how to have good control over his expenses and can save money. For that, you need to be a good role model and have a stronghold of your earnings and savings.
You can enroll them in different hobby classes so that he learns some extracurricular activities besides academics, which will help him to earn more in the future. Early monetary literacy will help kids to grow as financially responsible adults who will not only value money but also will use it effectively.