Parents should teach their children about money from an early age. Even preschoolers can understand some lessons about the value of money.
Failure to start their financial education early could lead to unreasonable demands in the family context. Also, a lack of parental advice about money can result in difficulties for the young adult after leaving home.
Here are five tips for teaching young children about money.
(1.) Give school-age children a small allowance
When children start attending school, they are exposed to opportunities to spend money and hear classmates talking about money. Giving an allowance is the best way to deal with the resulting demands for cash. Also, giving the child a lump sum every week forces them to plan so that the money lasts more than one day.
(2.) Provide opportunities to earn small amounts
When a task is outside their customarily assigned chores, offer the child a small amount to help. That could involve assisting Dad in cleaning the garage or helping Mom weed the vegetable garden. This experience provides an introduction to the concept of earning money through work.
(3.) Play games using fake money
Board games and card games involving fake money allow children to practice using money in various ways. The calculations and decisions they make while playing the games prepare them for using real money later in life..
(4.) Set up a fund for large purchases
Start a fund if your children are asking for something beyond the household budget, such as a backyard trampoline or a video game console. You could put in a sum to start the process, and the kids would then be invited to donate something. They could use part of their allowance or money raised through extra chores or garage sales. This practice helps children to learn about the sacrifices involved in buying the things they want. Also, it allows them to experience the satisfaction of purchasing a desired item with funds they’ve helped to raise.
(5.) Show children price tags
Occasionally show your child the price tags while shopping. Alternatively, show them the sales receipt when you get home, allowing them to begin seeing the market value of things they use.
If you allow small children to learn about money gradually, they will be much better prepared to begin making financial decisions in their teens. Also, educating your children about money should help to reduce their unreasonable demands.