It is never too early to start teaching kids about money. Equipping your children with financial education at a young age allows them to learn the value of money in our modern society, and also teach them how to respect the effort that goes into wealth accumulation. Here are some practical tips on how to raise financial savvy kids:
Get your kids to start saving
One easy way to start them saving is to set aside a piggy bank in the home, and allow them to see you saving money regularly and consistently to normalise the behaviour. Go shopping for a piggy bank and allow your child to pick out their own so that they would be motivated to fill it up.
Have money discussion with your children
You can plan a weekly family discussion time where the whole family discusses financial matters like budgeting for the monthly grocery shopping. It is good to let your child understand how you save, how you grow your savings, how you plan your purchases, and other financial planning. Getting your child involved at an early stage allows you to get him ready for a lifelong journey of financial planning.
Set saving goals and practice positive reinforcement
Come up with SMART goals with your child, and let them choose a reward if they manage to reach certain goals. Give your child plenty of encouragement and compliment them on their effort to save. Review the goals once in awhile and always reiterate that they’re saving up for a good reason – their future.
Play financial games
Playing financial games like Monopoly and The Game of Life is a fun way to educate them on money management. The games also take time to conclude, and this can teach them to be patient as investment returns are not immediate.
Match your child’s contribution
To motivate him to continue saving, you can review his savings monthly and pledge to match their savings a dollar for a dollar. This is a great way to encourage them, as it not only allows them to see their money grow, but also tells them you’re in this journey with them.
Look for bargains
When out shopping, make sure to look for sale items and use coupons whenever you can. Also show him how to compare prices of items at different stores. These teach him how to save and stretch their dollar, and also to delay gratification.
Donate to a worthy cause
Children should also be taught to empathise with others and donations is a great way to do so. Have conversations with them on those who are less fortunate; you could even pick out a beneficiary together to contribute donations regularly.
How do you teach your children about money? Leave a comment below.