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Teaching children about money can be difficult. It’s hard for them to value money when they are used to you buying everything for them, but when they are young, you don’t want to give them too much responsibility with money or what they spend it on. However, we must make an effort to educate them.
The ways children view money and the value that they place on it often contribute towards their financial habits as adults. Children who have their own money, who understand the value of it, and the importance of saving towards what they want, are often adults with good financial habits who are unlikely to get into debt. The children who are irresponsible with money, spending it as soon as they get it, or who have no experience with their own money at all, are often irresponsible as adults. They are more likely to have long-term debts and less likely to save.
Here are some easy ways to teach your children about money.
Lead by Example
It’s good for your children to see you save for things, instead of rushing out and buying without thought or putting things on credit. You might not think that your kids know about your financial situation, but they pick up on far more than you think they do.
Upload Money to Their Console
If your kids have a games console or tablet, it might be a pretty important part of their life. But, it’s part of the reason that teaching the value of money is now harder than it has ever been before. They download things digitally, they have subscription services, and they don’t fully comprehend the value of the things they are playing or watching. To them, it’s all free.
Uploading money onto their account or buying an Xbox Gift Card for them can be a great way to give these things more value, in a way that they understand. Let them upload the funds from their Xbox Gift Card, but explain that once it’s empty, that’s it. They’ll learn to limit their spends and to think about what is really worth buying.
Talk to Them About Setting Goals
Next time your child wants a toy or game, explain how much it costs. Tell them how long you’d need to work to earn that much money or explain how many weeks’ worth of pocket money they’d need to save.
Give Them Pocket Money
Pocket money is a fantastic way to create more financial independence. Instead of buying everything they ask for, or making them wait until birthdays and Christmas, give them a small amount of pocket money each week to spend on what they want. They’ll soon learn that if they spend their money straight away without thinking about it, they won’t have enough money to buy the things that they really want.
The best way to teach your children to be more responsible with money is to encourage them to think about it more carefully. Talk to them about income and household expenses, and encourage them to think about how much money the things that they want cost.