In this world, everything is connected to money in some way. Money for life is like what blood is for the body. Money is all and everything in life but it is necessary to understand the right ways to earn it otherwise money might come but happiness might leave you.
All of us know the saying “A penny saved is a penny earned.” So it is important that you teach your child the basic of money and saving while they are young.
Here are a few things to make your kid money cautious:
Teach them the value of money:
- As soon children can count, introduce them to money. Make them understand that money is precious and it is to be earned by hard work and smart work. It is important that your child understand that money doesn’t grow on trees.
Teach the Differences:
- Children should know the difference between our wants and needs. This will prepare them for making good decisions regarding spending in the future. Needs are the essentials – the basics of life that you must have to survive: food, shelter, clothing, medical care etc. Wants are basically everything else: eating out, entertainment, travel, gifts, gym membership, etc.
Be a Role Model:
- Set a good example and save money. Keep your own savings or deposit money in the bank when you are with your child. By showing you understand the value of saving, you’ll pass on practical real life lessons to your child.
- A good way to teach them this concept is by giving them some options to earn their own money. For instance, you can get a couple of works done by them without expecting your help so that you can reward them with some amount of money which they can save. This way you can motivate them about the concept of saving money. It teaches them that they have to work for what they want.
- Consider giving your child pocket money. It’s a good way to teach them the value of money. You could reward them for the jobs they do, giving them responsibility and creating opportunities for them to earn additional money from doing extra tasks.
Communication with Children:
- Communicate with children as they grow about your values concerning money-how to save it, how to make it grow and most importantly how to spend it wisely.
Teach Children to be Charitable:
- You can assist them in finding a good cause that they can understand. Encourage your children to donate money or resources to charitable organizations. This will help them see they can derive great satisfaction from sharing their money with those in needs, and also teach them important habits that they will carry with them for the future.
Introduce children to the value of saving versus spending:
- Explain and demonstrate the concept of earning money in one way that their saving should be higher than spending. Teach them how to limit their spending on what they have as saving. Later on, they also will realize that the quickest way to a good credit rating is a history of regular, successful savings.
Establish a regular schedule for family discussions about finances. This is especially helpful to younger children to learn the value of savings.