In a world of credit cards, online banking, investments and retirement plans, managing finances can be tough for adults, let alone children. So when would be the ideal time for parents to start preparing their little ones for a sound economic future? At what age should one beginning trying to teach them the value of money?
According to experts, it’s important for families to speak openly about their finances ― like their budget, for example. This encourages questions from the children and enables them to understand money better. Such conversations are also a good time to discuss the concept of living within your needs. So, as compiled from Huffington Post, here are some tips to help you teach this all important life-lesson to secure a bright future.
1. Give your children some money to work with
One way to teach kids about money is to let them have it. For this, cash is the way to go. “Cash is a tangible object,” said Gwen Tulin, founder and artistic director of Brain Arts Productions, a group that runs birthday parties, camps and other events that incorporate financial literacy with the arts. “You see it’s there and then it’s not.”
Tulin suggests caretakers take a few minutes to grab cash from an ATM and pick one store in which they’ll regularly use that money in front of their kids. “It helps make the idea crystallise in somebody’s mind,” Tulin said. “Cash is a foundation.”
Also, you can get creative with the cash that you give your children too. For instance, Chris Whitlow, CEO of financial wellness benefits provider Edukate, shared his family made bills featuring one of his kids’ faces that she was able to earn for various tasks. “It allowed her to do the things we asked at home ― some of them were emotional, like how she interacted with her siblings,” Whitlow said. “But those bucks had a very tangible utility.” This can help instill a sense of responsibility in the youngsters too as they now have to earn the money instead of just expecting it.
2. Don’t get overwhelmed with financial language
Tanya Van Court started Goalsetter, a saving and giving platform for kids, as a way for families to better celebrate birthdays and holidays without racking up a bunch of plastic toys that are hardly used. The founder and CEO says many parents are reluctant to start a conversation about money as they don’t understand it themselves.
Van Court wasn’t taught financial basics as a kid, so she made sure to introduce it to her own children. To help other families do the same, Goalsetter offers an Urban Financial Dictionary that explains financial terms by associating them with movies, TV shows, song lyrics and more.
3. Show that money can be a powerful tool to help others
When talking about money with your children, be sure to include the fact that some people are more privileged than others. “We not only want the lessons about allocating your money toward things that are important to you,” Van Court said, “but also giving back to other people that don’t have much stuff.” This will reinforce the idea of living within your means and also promote sharing and charity.
Of course, there’s no perfect way to teach children about finances. At the end of the day, they are children. The point is to try and inculcate a sense of vigilance about money so as to prepare them for their future.
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