How to teach your child the importance of money

Monetary matters are best kept away from children, isn’t it? Wrong! Your kid needs to have a solid founding in economic dynamics and the importance of money. When children are taught the value of money at an early age, it benefits them later in their lives. They gain enough maturity to handle money matters on their own in your absence.

Kid with kiddy bank

This leads to a respect for money and helps them regulate their day to day expenses.

Here are some tips that would help you teach the importance of money to your child:

1. Encourage them to Save

Children should be taught to make small, continuous savings all through the week.
These savings could be stored in a piggy bank and later used for buying their favorite toys/commodities.
Parents should reward and appreciate children when they successfully complete the task and gather enough savings on their own.

2. Teach them the value of investments

Instead of purchasing expensive unnecessary toys in the spur of the moment, encourage children to save money and later use their accumulated savings to purchase better items they really need.
Encourage children to buy books and useful DVDs since these would not only serve the purpose of entertainment but also help them learn.
Prompt your kids to set goals about the amount they wish to invest in something, and show them how waiting for the right time to invest can give them better control over their money and reduce wastage. Setting goals can really help your children plan ahead. Click here to find out how.

kid with kiddy bank

Teach kids the importance of investments

3. Reducing Wastage

A lot of money in the household goes down the drain by not reducing unnecessary wastage.

At the end of the academic year, ask children to collect all unused papers from their notebooks before throwing them away. These papers could be later used for rough work and quick scribbles.

Teach children how such simple steps go a long way in helping avoid irrelevant expenses that are simply not needed!

4. Follow the rules yourself!

Children learn from their parents. For them to value money, it is most important that you set an example
first!

When you visit supermarkets, take your kids along and teach them to shop according to the budget.

Real life situations and examples are the best way to teach children the importance of money.

5. The importance of paper currency

Few people today buy products with actual, physical cash. All transactions are done through credit cards, online shopping, and internet banking electronically.

This makes it harder for kids to understand the value of money since it becomes a mere virtual token that is abstract in nature being never seen!

Encourage children to accompany you when you visit ATMs so they understand where the money comes from. This is the money that the parents had earlier earned and saved in their accounts, which is now serving a particular purpose.