It doesn’t just happen that you’ll be able to manage your money well and make sound financial judgments. We must explicitly and age-appropriately educate youngsters on the value of money. This is especially important now that marketers have honed their pester power across the board, from television to YouTube, children’s magazines to online gaming.
Financial literacy should begin at a young age and progress in scope and complexity as time goes on. However, given that money does not grow on trees, we must teach children about money. Here are some tips for you.
Describe the process of making money
Your child should know that not every ATM is equipped with a printing press. Explain that the bank is similar to a giant piggy bank where you can deposit your money until you’re ready to spend it. Tell her that after you’ve finished what’s in your account, it’s gone until your boss pays you and you can add more. She should realize that she won’t acquire whatever she wants and make prudent financial decisions.
Improve your child’s financial literacy
Make a chart that displays real money equivalents to help him remember what he’s learning at school. Put it up on the fridge or in your child’s room. Assist him in converting pennies to nickels, dimes, and quarters to dollars. Next, put price tags on items around the house to play store: 50 cents for a pencil, 75 cents for a rubber ball, and $2 for a Hot Wheels car. Assist your youngster in calculating the price of each item. Then hand him two one-dollar bills and tell him that he has enough money for the pencil and ball, but not all three. Allow him to make that decision.
Set aside some money for your child
She should buy small stuff like trading cards, hair clips, and ice cream bars with it. Tell your child that if she thinks she might want to buy something the next time you go shopping, she should bring money. What if your kid has spent all of her money on ice cream but still wants it? Tell her she’ll have to wait until the next day of her allowance. You’ll destroy the purpose if you give in. Help your child determine how much she needs to save each week to buy something significant, like a new hardcover book or a toy. Ensure she has a transparent plastic bank to keep track of her funds.
Teaching children to spend their money on things other than themselves is a good idea.
She recommends that they give a portion of their allowance to charity. According to most experts, a child’s allowance should not be tied to home responsibilities. Children should assist around the house because they are family members, not because they are being paid.
Allow your child to participate in some financial activities
Assist your child with counting out the exact amount when she wants to make a purchase. Allow her to give the cash to the cashier and wait for her change. If your child prefers to spend $3 on vending machine toys rather than saving it up for a Beanie Baby next week, explain the trade-off but let her make the final decision.
GD Goenka Signature one of the Best Boarding School in India must take responsibility for teaching youngsters about money and its value. This generation of kids is growing up in a consumerist environment where they are constantly presented with opportunities to spend money. They need to be provided the proper foundations to navigate this world as adults and avoid being debt-ridden. These foundations begin in the comfort of one’s own home, with financial literacy.