Money makes the world go round so it’s important to learn How to Teach Your Kids About Money Management.
It’s a saying we’ve all heard before, and while it might not be entirely true (after all, there are other important things), there’s no denying that money is important.
Since money forms such a big part of our daily lives, knowing how to manage it is vital.
And it’s just as important to teach your kids how to manage their money.
It may seem bizarre to have “grown up” conversations with children, but the sooner they understand how to manage money, the better.
Here’s How to Teach Your Kids About Money Management:
Teach them about investing
Investing may seem like a very complex concept for a young child to grasp, and it is.
But it’s still important for them to understand what investing is.
You can make this easier by making it more understandable for their young minds – use an example that utilizes things that they like, such as toys or their favorite movie characters.
You can also use external resources.
There are various fun and educational videos about finances on the internet.
When talking to older children, speak in their language by using technology.
Have a look at the best investment apps for kids to see if any of them would be a suitable method of helping your kids grasp investment.
Help them save
if investing seems a bit too intimidating a subject to approach with your children, try talking to them about saving.
In fact, you should talk to them about saving even if you have taught them about investing since the two go hand in hand.
The idea of saving is more likely to stick with younger children, especially if they have a visual aid, such as a piggy bank.
It also helps if they’re saving towards something, like a toy they want.
Set up a mini-budget
As an adult, you’re probably familiar with budgeting.
Monthly budgeting, holiday budgeting, back-to-school budgeting – it’s part of day-to-day life.
And it’s a way of teaching your kids the value of money management.
More importantly, it will teach them that money isn’t infinite, so how they spend it matters.
You can help them set up a budget.
For example: if they get $5 a week, them $1 could go to their savings, $2 could go towards toys, $1 towards sweets, and $1 towards activities with their friends.
This will help them be more aware of how they spend money.
Take them shopping with you
This may seem a bit out there, but it’s the best way to teach your children about management.
We all know that children have a better grasp of things when they can see them.
Talking to them about finances is great, but how much of it do they really understand?
Take them shopping with you, and compare different items to help them understand the effect that cost has on how you spend your money.
A good way of helping them understand money management is showing them the price of popular toys, and then telling them how much food you can buy for that price.
This will give them a practical example of money management.