Regardless of whether your child is two or twenty-two, he will come face to face with money at some stage.
So let’s talk about teaching your kids about money. Below are some of the most important topics to discuss with your children when it comes to finances.
Some questions are designed for little savers while others will need to be explained later on down the road. Get your child off to the best start by explaining how money works.
10. Money is for buying things, not eating.
This is the first lesson you will teach your children and usually this lesson comes in infancy. As soon as your baby is able to crawl, you can expect her to take an interest in money and your wallet. So keep coins and bills out of reach to avoid having these items shoved into her mouth.
9. Money is valuable.
Your children should learn to identify what money is (in relation to paper) and what gives into the bin and what goes into the wallet. Money shouldn’t be thrown around the house or your children may assume that it is not important.
8. Saving is just as important as spending.
Spending money is so easy and so much fun but saving for a big goal can also be rewarding. Try to teach your child about the big picture and end goals by saving for a big project together.
7. Saving can result to a bigger reward.
Young children will not be able to understand how interest works. However, Forbes suggests that children aged 10 and older will be able to grasp the concept of accumulated interest and how saving your money can mean you are actually making more than spending it right away.
6. It is important to work for your money.
If your child is getting everything handed to him, then he will have a hard time understanding that you need to earn your money. Don’t give him a false sense of entitlement. Help him to understand why Daddy goes to work and how he is able to afford clothes, toys, etc. Set up a chore chart and let him work for his money.
5. There are various forms of money.
Teach your children about what each coin is worth and what each bill is worth. Once he has mastered the art of counting coins, then you can move onto the concept of credit cards and bank cards.
4. Giving is just as fun as spending.
Your child will soon understand that you need money to buy things. When this day comes, teach him how important it is to use the money to give gifts rather than just receive them or buy things for yourself. Help him to understand the importance of giving, not just receiving and how special it is to share money with others.
3. Money is limited.
The earlier your children learn about budgeting, the better. Let him in on how the budget works and how much you are able to spend each week. Once the money is gone, he needs to understand that that’s it.
Life is all about unexpected surprises and ups and downs, and this is always the case when it comes to the economy. Some weeks are good; others are bad.
1. Money isn’t everything.
Finally, while money buys toys, electronics, food, clothes, whatever, it isn’t everything, and there are so many more important things in life, such as family and sharing. Teach your children as early as possible how important other aspects of life are just as important.