Kids don’t have the knowledge that how their parents are getting money which they spend in buying their desires. Sometimes it is difficult to manage the house hold expenses as your kids are demanding things that are not pocket friendly.
Parents should teach kids the struggle they do at work to earn a handful amount which is just enough to carry on with the necessities. Teach them to save and give them financial lessons so that they have the sense of spending in present and in future.
Give your child a financial head start in life by cashing in on these tips a guide by emeryconty.
Job Hunting
First thing kids should know about is the source, tell them how you get the money they are using. If youll ask a kid that from where is the money coming? The most predictable answer would be from the bank. Most kids don't have an idea about jobs and offices. To make them more financial friendly, tell them why you go to the office and what kind of work are you doing. The most important thing that you should tell them is that one day they will be doing the same and at that point they will realize that how difficult it is to manage the spending. You can tell them some easy ways to earn money at a smaller age, ideas like selling hot chocolate and old toys would definitely be beneficial. Super Shopper To give them a better understanding, turn your kids room into a store and put price tags on products and give them cash to buy the products. Unlike those which don’t have any benefits, it can be played as a game for fun, which will teach them a lot of things like how to spend the limited amount of money wisely. To make it more interesting, ask them to make a list of things they want and make an estimate of the total amount. Moreover it is a healthy practice for mathematical skills as well. It will involve calculation, addition, subtraction, and the basic mathematical skills. As they get savvier about spending, give them some money and a short list and make them in charge of buying things in the real world.
Allowance Bank
Kids should have some amount in their pocket. If they don’t have access to money, they`ll never know how to handle it. Determine the amount of allowance; experts suggest $1 for 4 year of age per week. Teaching bank stuff will surely help them in future. So, play another game of “Pay the Bank”. When the time comes for an allowance, issue your child a pretended check. Follow the rules as you have to follow at the real bank and while playing ask them questions like if they want all the money or would like to keep some in the bank, teach them the benefits and discuss the reasons they might want to save some. This will make their financial understanding better.
Compound Savings
Kids think very short term, you have to engage them to think for longer benefits. Most of them save money for toys or any other desire and once they have ample amount in their piggy bank, they go for the product. However you can improve their saving skills, you need to make an effort as well. The best tactic would be a child version of 401(k) plan. On every saved dollar, you add 50 cents of your own. It will be manageable as 50 cents is not a big amount. It will help them to think beyond their thoughts. Furthermore if the plan is successful a goal and progress chart will be a good addition to it.
Reality Check
Reality check! If your kids are demanding something that would be useless and is rather a want than a need, go for the reality check. Kids should know the difference between a want and a need. Needs are air, water, food and shelter without them there is no life. However wants are what you desire, which are limitless. Tell them about the people who don’t even have the necessities and you should be thankful to what you have been provided.
Teaching your kids to save money is the easiest way to make them financially responsible and if you start teaching it at an early age, it will definitely help them in future.