How To Effectively Teach Your Kids About Finances And Money
As an adult, you know how vital financing and budgeting money for everyday life. It involves cash from buying foods, clothes and paying different bills for the month and in almost everything you do. Today, you may be noticing how hard it is sometimes to divide the money you have in hand properly.
And it gets you thinking, would it make a difference if they taught you how to manage your cash effectively at a young age? Yes, it will make a total change in how you see and value money. If you have kids by your side, start educating them on understanding finances and funds quickly. Listed below are the possible teaching ideas you can apply.
1. The Art Of Patience
It is undeniable, knowing children, it is hard to resist when they ask for something, mainly because you do not want to upset their feelings. However, that should not be the case, especially when it is all about money. If you’re going to be successful in educating the children, you should consider starting with training them the art of staying patient.
Whenever you go to the mall or even the convenience store bringing a child with you, most of the time, they will point at foods or toys they want. Instead of buying them, talk to them in a language they understand and tell them to save up for it.
This thought may be hard to grasp for kids, but with patience from you, too, you can demonstrate to them what they need to learn. Children must bear in mind that they cannot get everything they desire unless they also exert effort to get it.
2. The Period Of Decision Making
One of the crucial life lessons you are practicing is when to make the right decisions. Being an adult, when it comes to finances, you calculate mortgage, figure out how much you need to buy properties, houses, or lands. And these kinds of thing requires more in-depth thinking. Although children would not realize this yet, you can always explain it in simpler terms.
For example, you can use the idea of 3S, which stands for Sharing, Spending, and Saving. Experiment with this, give your child cash which, little by little, you will explain how decision-making works. Each day, let them determine how much they want to spend with friends, how much money would go to toys, and how much left behind will be for savings.
Remember, you are there to guide. Hence, even if you think the kids are putting more on their toys than for friends, let them. Avoid scolding nor yelling at them. After all, the lesson here is for them to be independent in handling money. Before going to sleep, you can open a discussion and ask why they did such a thing. Let them realize what could go wrong.
3. Differentiating The Wants From Needs
What comes with the principle mentioned above is determining what you need and what you want. It could be quite tricky for children since it requires exposure to specific life scenarios they do not currently have. However, you cannot also disregard that it is among the essential learning they could get. You can quickly introduce this topic by following the steps below.
1- Get two pieces of paper and pens.
2- Let the child sit beside you and put the pens and papers on the table.
3- Ask them to write down the things they want, no matter what it is.
4- Do the same, but you will be writing down the basic daily needs.
5- Engage in discussion, ask why he or she chose such things.
6- After writing, compare your answers to one another.
7- Show him or her what is on your paper, and let him or her recognize all of it.
8- After which, it is now the proper time to explain how you prioritize needs from wants.
Once you think they get the idea, try expanding it by adding why they should not put wants first. What matters is how you convey the message to the child. If you can be creative, then do so. Make them listen through spicing up the conversation. Use their favorite cartoon’s name for make-up scenarios or anything that piques their interests.
4. The Comparison Shopping
One of the things that children find fond of doing is shopping. There will be days when you go to the mall and request you to buy them something. If you have the budget, then you can opt to buy them whatever it is. But if you did not bring a sufficient amount of money and did not want to make your child feel bad, consider going for alternatives.
The idea revolving around comparison shopping lets your children hold on to the same product but have different brands. One is more expensive, and the other is cheaper. You can try experimenting with this notion through the following key points, as discussed below.
- If your kids can read, let them locate the product details.
- If they cannot, read it for them instead.
- While going through the details, count how many similarities they have and compare them to the differences.
- Look for the price too and determine which has the lower and higher value.
- If the similarity outweighs the differences, you can choose the more affordable product since it offers the same features. The only time you should consider the more expensive one when there is a visible difference in the quality.
When you successfully deliver the experiment above, you can now further explain to your children why there is a need to always look for a product alternative always. And that comparison shopping is a principle they should not forget, especially when inside a store’s premises.
To sum it all up, several techniques are available to educate your kids on managing money efficiently. The notions stated above are guides you can incorporate into your teaching. It becomes more comfortable for the children, and there will be no reason for them to experience hardships in financing in the future when they also grow up to be an adult like you.
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