It’s surprising how our schools don’t teach children about money. If they teach them calculus and physics even if they clearly state they want to be a literary writer, you’ll wonder what’s wrong with the academic curriculum that they can’t bother to have a class about financial literacy and management. Why don’t we teach kids about money when it has proven time and again to be one of the most important things in our lives? Not that our focus should only be money, but that we need to know how to earn, handle, manage, spend, and save it.
Children as young as three years old can already grasp the meaning of money. They at least know about saving and spending for their toys. Research even showed that their spending habits are formed by the time they reach seven years old. So, the sooner parents teach these kids about the concept of money, the better it will be for the kids.
Get Three Clear Jars
While the piggy bank is a great idea, kids need to see visuals. The clear jars will let them see that the money is growing. Why three jars? The first is for saving for expensive items. The second one is for spending on candies and other small items. Finally, the third is for sharing their money either to buy a gift for their grandparents or to use it to donate to a cause.
Open a Bank Account
A lot of credit union that offers savings account also has junior savings account for kids. Open an account for them in the same bank where your account is. This way, it is easier to manage the account. After they filled up their jar for the expensive items, take it to the bank and have them deposit the amount into their account. They will have a physical understanding of how much money they are saving. You can also explain to them that their money will accumulate interest if they don’t withdraw it.
Set an Example
Kids are very observant. If they see you using a credit card all the time, they’re going to think that it’s the norm. Be an example to them. Show them how you’re also paying for the charges you put in that card. When you create the monthly budget for your home, sit them beside you so they can see how much is going to food, bills, mortgage, and other things. Don’t be afraid to explain this to them.
Give Them Commissions
When you ask them to do something, give them commissions and not actually pay them. Paying them will make them think that they have to receive an amount of money for everything they do for you. Instead, what you can do is give them commissions like $5 for cleaning their rooms. You’re not actually paying them to do chores, but you’re giving them a percentage of what you would have paid to a professional cleaner for doing what they should be doing.
Create Goals
Whether it’s buying a new toy or going to the amusement park, make sure your kids have goals for their savings. When they grow older, their goals can get bigger, too, such as traveling to Paris or going to college with big savings. As kids, give them $10 to spend in the grocery store. Make a short list for them and see if they can buy those items with their $10. That’ll teach them the concept of budgeting.
Teaching your kids about finances will give them the skills they need once they set foot in college. These skills will also be essential when they start to build their careers and their own families. Taking the time right now to teach them these skills will help them to become better individuals in the future.
