A recent survey by CreditCard.com showed that one in four U.S. adults who have children under 18 was provided no money lessons when being a kid. In teaching your children about money, it is essential to teach them how and where it comes from. Let’s now discuss how to give kids simple money lessons for them to win with money at any age.
A Simple Start
The idea of having a piggy bank is excellent. But children should see the money inside it. Using a transparent glass jar instead of a piggy bank is a fantastic idea to notice how the money is growing day by day. As a parent, you should make a big deal of increasing capital and show them the importance of having savings.
Little Eyes Are Watching You
Be a good example for your kids. It is said children are forming habits at about the age of 7. Be a healthy example for your kids from the very first stages of their lives. If they see their parents constantly arguing about money, they acquire the habit. If they see their parents building emergency funds, they learn it. The real value is in seeing mom and dad’s actions adjusted with their words.
The Cost of Toys
Ask your children to grab some dollars from their jar and take them to the store. Allow them to pay for their toys by themselves and feel the actual value of the money. This straightforward action will make them understand the tangible balance between cash and product.
One of the key aspects of money lessons is to teach the children the word “No.” If your children always have money for every single wish, it means you are not teaching them how to be patient and wait. Help your children determine how much they need to save before they can buy what they want. After all, if they purchase it, chances are higher they will take better care of it.
“If we buy this toy for you, we will not have money to buy that pair of shoes.” Showing your children the opportunity cost will help them understand the possible outcomes of their money decisions.
Let Them Earn Money
Never give your children money as allowances. Let them earn it with simple actions of taking the trash, collecting their toys, or getting a good mark at school. This action gives them the idea that money is earned, not just given to them.
Give Them the Responsibility
As your children are getting teenagers, set them up with an ordinary bank account. This is the next level of money management lessons that prepares them to have a much larger account when they grow.
How Are We Going to Pay for the Education?
Before your children apply for a college, you should warn them to keep far from student loans as a source for a tuition fee. Show them alternatives in earning during holidays, working part-time while studying, and applying for scholarships.
Investing basic money rules into your kids when they are young is crucial. These rules will help them to make wise financial decisions for the rest of their lives. Now is the best time to start.