Financial struggle is a legitimate problem faced by many today as they fail to manage and plan their finances properly. Evidently, teaching children about something that grown-ups often fail to process is not an easy task but nevertheless extremely important. The problem many of today’s youth face is the management of finances. That ends up them in facing problems in their future. Parents should initiate to teach children value of money from an early age so that they understand its importance. Parents being the most influential figures are the ones to educate them why financial skills are crucial in life.
Want to teach children value of money, here are five powerful ways:
1. Encourage saving
Children at a very tender age will obviously not relate to finances and skills related to it. No matter how hard you try as a parent. The best alternative to teaching about money is gifting young children a piggy bank. This concept has been around for a while. Put all cash gifts from birthdays, events or any kind of festival together in the piggy bank. Simultaneously you can add a little every now and then too. Make it a habit of counting the accumulated money every 3-4 months or so. Buy them a toy, or an instrument or anything of his choice from the same. This not only teaches your child about savings but also inculcates an idea of goal-setting at an early age.
Ensure your child grows up with a sound knowledge of finances and learns the essential tricks to manage money. You can make it a habit of involving your child while planning your monthly expenses for the household. Even better take some time out and help them manage their saved pocket money. Impart advice on how to spend them.
3. Choosing expenses
One of the main aspects of inculcating financial planning in your child is also making him aware of the expenses. Teach him to spend money wisely, spending in the right choices. Children will not understand rationalizing expenses and this is where you as a parent can help. You can teach him how one should not always spend all their savings. For example, give him choices of things to buy with his pocket money. Then, help him choose the best essential thing to buy, instead of buying more things. This will also teach him to not spend all at once and save pocket money for future goals.
4. Chalk a budget
We all know how important it is to plan a monthly budget for our household. And then go about the month with our expenses keeping our tentative budget in mind. Try to incorporate the same method in your child. Give him pocket money and encourage him to plan ahead for a week of expenses based on that.
5. Teach investments
This will eventually be essential with time. Teach them about savings account and investments, where they can not only save but also watch their money multiply. Money properly invested from an early age can be extremely important in the long run.
Including household chores in their daily routine is the most effective and simple method to teach children value of money.