Exposure to Money Values
One of the toughest aspects of parenting comes at a young age, when children are expected to learn about money values. With the cost of living on the rise, it is more important than ever that children learn how to respect money, save it, and use it wisely. While some may believe that teaching kids about money is a ‘no-no’, many experts believe that this is an essential part of parenting in today’s economy.
Knowing the value of money is an important life lesson that can be taught to children in a variety of ways. Exposure to money values through regular conversations and day-to-day activities is the best way to ensure that kids understand the concept of money. In this article, we will explore some tried and tested ways of introducing money values to your kids in a fun and safe environment.
The Value of Money
The first step to teaching kids about money values is to make sure that they understand what money is and how it works. This may seem obvious, but often it is something that parents tend to overlook.
Some of the basics to teach include the fact that money can be saved and spent, and the importance of budgeting for both. Discussing the difference between wants and needs can also be helpful, especially when it comes to managing expenditure.
Creating a Family Budget
Creating a family budget isn’t always the most exciting of activities, but it’s a great way to show children how households use money. By revealing the budget process, you can give them a realistic idea of how to manage money and how to make it last.
Showing them the monthly spending helps them to understand the importance of staying below their budget. This can then be applied to their own finances later on.
Learning From Experience
Children learn more from doing. So, as a parent, it is important to have conversations around money that are direct and honest – then let them put what they have learnt into practice.
Taking them shopping is a great opportunity to discuss budgeting. For example, when given a set amount of money to spend, talk about the cost of the items and the benefits of looking for discounts.
The Importance of Giving and Saving
It is also important to show children the importance of giving to others and keeping some money aside for a rainy day. Giving them the chance to save a percentage of their allowance every month is a great way to demonstrate how important saving is.
Explaining how to save in a bank is also important – but this exercise is best left until your child is a bit older and able to understand interest and why it’s beneficial to save up.
Introducing Financial Responsibility
Once your child has a basic understanding of money and its importance, they are ready to take their learning to the next level. Introducing them to financial responsibility is the next crucial step.
Doing so starts with managing their own money. This could involve giving them small amounts of money to buy something that they want and setting rules for them to follow. Once this happens, it is important to then monitor their progress and give feedback.
Also, encourage them to use an online banking system. This will help them to get into the habit of managing their finances and understand the concept of online banking.
Talking about future plans is also important, such as the importance of college and how to save for tuition fees.
Teaching Through Action
Of course, the best way to teach kids about money is by example. If they witness their parents making wise choices when it comes to money, they are more likely to emulate this behaviour in the future.
Therefore, always be mindful of your own spending and money management, as children will be watching and learning from you. If you are able to lead by example and show that saving, spending and budgeting money doesn’t have to be a painful process, you will be laying the groundwork for their financial success in the future.
Money values – and conversations about money – can easily become an uncomfortable topic. But if handled correctly, it’s an important tool for parenting. By taking the time to educate your children about money, you can make sure that they understand the importance of budgeting and financial responsibility and become more successful with money in their later life.