Easy Ways to Teach Kids About Money
Teaching your kids about personal finance can be tough. Until your children are earning their own money it will be difficult for them to understand its value, as well as the consequences of spending outside of your means. Expect your kids to fail and to become discouraged and simply uninterested when it comes to personal finance, however, there are many lessons and activities that can help your kids on their way to financial success.
Setting financial goals
Children can set financial goals on a small scale. Maybe there is an item they are longing for such as a new toy or device. Teach them to avoid impulse purchases by waiting until they have saved enough to buy it themselves. First, set a realistic date in which your child’s goal can be achieved by, then together, work out how much they need to save per week/month to achieve their goal.
Keep financial goals interesting
Children respond better to visual cues. Use more charts, colours and shapes like you see in the classroom and less numbers and grids.
Rewards and incentives
Allow your kids to earn a small amount of money by helping out with jobs around the house. Give them incentives and rewards for saving; you could match every $20 they save.
Do not put it on the credit card
Help your children avoid the debt trap by using credit cards responsibly. It is easy for kids to believe that credit cards are free money, that’s why it is important to stress that if you can’t afford something you should not buy it.
Involve them in financial decisions
Your children could help you make a shopping list. At the supermarket assist them in choosing the best deals to save the most amount of money. Create a challenge to spend less every time you visit the supermarket!
Let apps do the hard work for you. There are lots of fun apps that can teach your children about personal finance. For example the classic board game ‘the game of life’ is now available in the app store. It will keep your kids entertained for hours!
Not keeping up with the Jones’
The toughest lesson of all. As a child you want to fit in, you want to look the same and have the same things as all the other kids. This means when all the other children have iPhones, your child ‘needs’ one too. This is a crucial time to teach your children their values. Remind them what is important in life other than money. If you buy your children many material items, they will grow to believe these items are an important aspect in their life.