Most parents are skeptical about talking to their kids about money because they feel issues of money should be discussed by matured minds and might corrupt their kids. With the current world economic situation, no one is too young to know about finances, even kids because good financial education will help them to become financially successful in the future.
In order to teach your kids about money, you have to practice the following:
Early financial education
Children get to see money at a very tender age. Whether you like it or not, they already know what money is, so, the earlier you start talking to them about the importance and ways of managing money, the better for both you and them because it will affect them in the future.
Teach them through daily activities
Many parents want to teach their little children about finances but they don’t know how to go about it because of their children’s low level of understanding. Teaching little children about financial literacy can be done through everyday activities. For example, when you and your child go for shopping at the mall, explain to him/her about the different prices of goods. Also, when you and your child want to make use of the ATM, make the child know what the ATM is all about. You can get more methods from online websites such as www.thegreatpiggybankadventure.com and www.charitynavigator.org
Motivate your children to get a job
You may not want your kids to work and contribute to the family’s up keep but you should encourage them to work in order to save some money for themselves and even college. As they get to work, they will learn realistic implications of money.
Give them an allowance
You shouldn’t just give your children allowances simply because you feel that they need the money. You should enable to make them understand the relationship between work and money i.e they should know that money can be legitimately earned through work. You can even reward them for carrying out a task successfully.
Make a budget for expenditures
In order to make your children knowledgeable about money, you should provide a budget for family expenditures. In the budget allocated to them, you can start by allowing them decide how to spend their own money in order to see the financial decisions they will make, then you can come in to teach them how to do it rightly.
Open up a savings account for them
By opening up a savings account for your children, you will encourage them to develop the habit of saving up some money. In order to encourage them, you can give them an incentive for thrift. Most banks operate specific savings account for children
Educate your children about retirement savings
You shouldn’t wait until your kids get to college before they know about saving up for their retirement. The earlier they learn about this, the better as it will adequately prepare them for what lies ahead, when the time eventually comes.
Teach them how to make investments
As they begin saving, when they save up to a reasonable about, teach them how to open a custodial investment account, as this will help them gain money on the long run.
Be patient with them
In the course of these, you shouldn’t get angry whenever they refuse to take your advice. Remember, they are kids; they need to make some mistakes, in order to learn from them.
Avoid being a life line
When they encounter certain financial challenges such as a bounced checks or withheld ATM cards, allow them to sort it out by themselves. You should only come in when the situation is beyond their control.