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Money, may not make the world go, but it definitely is one crucial element that keeps life on track. So among the important life lessons that parents feel the need to teach their children, teaching them the value of money and making them aware of the financial responsibilities that they will have to take on as they grow up, is of utmost importance.
It is not an easy task, as finances are complicated always, even for adults. So for kids who’ve never know nothing of where all things they love have come from, it sure will be a challenging task to comprehend the mechanisms of the financial world. But then waiting for them to grow up and then introduce the whole concept, will probably be too late for them to embrace it conveniently. Therefore, start soon.
Here are a few easy ways to teach and make children aware of the significance of money and how to save it to make life better:
Nothing comes free: Happy realization
From early on in life, your kids should know how hard you and your partner have worked and are working to secure him the comfortable home he lives in. This does not mean that you start price tagging everything around, like, the stroller cost us this much or we paid that much for the dress you are wearing or we pay this amount of EMI for the house that shelters us. Be careful and subtle, the purpose should be to let the child have the realization that one needs to work hard for every comfort in life. So it should be like- “You know why we love this house? Because daddy and I worked hard for years to earn enough to buy it.” or “Baby, be careful not to spoil the dress because it will be a long time before we buy such an expensive dress for you again.”
Work for the things you want
Teach them how hard work helps to earns things that they want. From early on in life, encourage kids to help you with domestic chores like making their bed,setting the table, dusting etc. to earn their daily allowance. As they grow up the works may also get more serious like mowing lawns or cleaning the car etc. This will help kids value everything they want, because they will not just get them rather will work to earn them. It will set them to the path of success, as they’ll not hesitate to work hard to get their desires fulfilled.
Keeping Your Money Safe
When your kids get pocket money, or money as a reward for their help and work, teach them to safe keep their ‘own money.’ Make them understand that they don’t have to spend it all if there is no immediate need. This will help them money management and initiate their savings. So introduce the age old ‘piggy bank’ to your kid. Encourage them to put any money they get as allowances or gifts in their piggy bank regularly, and keep a note of how much has gone in there. Later, you may open saving accounts for them in a bank.
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Planning for future
Inculcating a habit of saving will in turn help them to learn another important lesson regarding saving and that is planning for the future. So show them the brighter picture of keeping from spending uselessly now so that they may spend it on a worthy thing later. For example explain them how not spending on cheap candies and wafers can help them to save for the remote control car. And when, one day suddenly they see something in the market and desire it, show them how it’s their great fortune to have it because they had saved for future. This will teach them a great lesson about sudden financial burdens and how saving help in coming out of them.
Distinguishing between Wants and Needs
First of all, parents must teach their children to learn distinguishing between their wants and needs. Next, to fulfill both, they themselves should be responsible. So if they lost a pencil box and ‘need’ a new one, encourage them to use their own allowance or if the old one is still intact but they ‘want/desire’ a new one because it’s more fancy and everyone in class has it, then too they should only dig in their own pockets. However, in the latter scenario make them see the other side of the picture- the things they could have bought had they chosen not to give in to their desire, like they already had a pencil box, and could have added a new crayon kit to it, but now only have one waste and one new pencil box.
Borrowing Should Be the Last Resort
Now when the realization of having and keeping and saving money has got into your child’s brain, make them understand, how important it is to be self reliant always. However, not always can they bear their expenses and why would they, they are still kids. But the only reason why you need to make them spend their own money on certain things is to help them realize the value of money, and therefore, even if they run out of money don’t pay for things they are supposed to manage on their own. Here you may introduce the system of borrowing, but making it very clear how it should always be their last resort, because ultimately the money will come from their own pocket, and that they may have to pay more than the original amount as interest.
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Teach them the limits
For children it may not come easy to understand why everything they like cannot be owned, and why everything a friend owns may not be in your means to afford. So fixing a pocket money is an easy way to fix their limits. For instance, if you’ve set a weekly allowance of Rs100 for them, they will have to manage in that amount no matter how. Explain to them, how people’s earnings vary, and it is according to the amount they have that they spend and not the other way round.
Teach Them Not To Be A Miser
In your effort to instill a habit of saving in your kid, don’t turn him into a miser. Again the ‘needs and desires’ distinction will work. Explain them how futile is the task of saving for a future luxury by forgoing the present needs. For example, if one saves for a movie ticket all week by sacrificing his canteen allowance and starving himself, then falling sick on the very day of the movie, how unfortunate that will be. Explain to the child, while saving is important, one has to spend on what is important and cannot ignore it. Also, that when someone is in need, lending a helping hand is always the right thing to do.
