It is never too early to start teaching kids about money. As most of us, around the globe, is going through some financial troubles due to Covid19, it becomes all the more important to prepare our kids for any such crisis. Teaching kids at a younger age about financial responsibility helps in cultivating a sense of ownership in children.
Taking baby steps towards this when they are young, will help ensure that our kids grow up financially savvy and responsible. Being from a household, where discussing finance with young kids was felt simply overwhelming or inappropriate, I understand the mindset however later on during my adulthood I realized how important it is.
What Is Financial Responsibility When It Comes To Kids?
It refers to the process of managing money and other similar assets in a way that is considered productive and is also in the best interest of the individual, or the family, or the business company.
We would never ask our children to start driving once they are of the right age without proper training or practice well, financial responsibility is a life skill too and once needs proper training for this.
How To Teach Our Kids About Finance?
- Set a good example
As with so many things, what we do matters. Our financial behavior will set an example for the kids. The practice of teaching the importance of the value of money begins at home. Always put purchases into context and do not forget to emphasize that material goods are not what make people happy.
- Games that involve money and saving
We all have grown up playing monopoly and it is definitely a fun way for kids to learn about money. Let them pick their favorite piggy bank or wallet and make them understand the importance of money. Make sure that your child has a safe place to keep their money.
- Do not make Money an Off-limit topic
Discuss the cost of our day to day use of things like groceries, snacks, or clothes to make them understand how it works. We don’t want to burden the kids, make them feel responsible, and give them a real-world sense of these transactions sometimes.
- Establish good habits
How about implementing a routine for kids to understand their importance. Use money as a motivation to help the kids grasp the basic concepts by having them earn their money through weekly allowance, and then share, save, and even invest a small portion each week
- Teach them restraint
We might want to give our kids everything they ask for, but doing so could have negative consequences. A young adult unaccustomed to hearing “no,” might find it especially difficult to exercise control over money.
Teaching kids about money must be a part of regular household routines, for example, going to the grocery store. Tell your child what your budget is and make a game of buying what you need under that set amount. A small initiative can bring major changes in their understanding of money in the long run.
Managing our finances during these tough times can be a daunting task however, someone guiding us through can make a lot of difference.
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