4 useful strategies to teach children about money
Many parents do not know the right age to start teaching children about money.
Financial education may seem an abstract concept, which surpasses the children if they are very young, especially when they have to learn so much more practical things.
In addition, once they reach a certain age, anything you try to tell them comes into one ear and comes out to the other.
Is there a perfect age at which children are able to understand financial concepts and are receptive to what family members have to say?
Or do you just have to leave the kids on their on and wait for them to make the same financial mistakes?
In fact, it is possible to start financial education for children at a surprisingly young age, and they are able to be receptive to what you are learning indefinitely, as long as everyone attending sees these lessons as fun.
Here are 4 helpful strategies to teach children about money and personal finances:
1. Teach them by the power of the example
Parents have the power to invoke parental authority when it comes to money, but even children can figure out whether you are credible or not. If it is clear to you that you are not making proper decisions about your own money, how can you expect to teach them how to spend their money correctly?
In essence, transparency and sincerity are the best solutions: call the children to look at when you pay your bills, when making other bank payments or directing some money to your investments.
This works especially for younger children who still have the impression that everything their parents do is very interesting.
2. Give them an age-appropriate allowance
No matter how smart some children are, until they do not have money in hand and will not use them to buy things, money will remain for them an abstract notion.
That’s why it’s important to start giving your children a small allowance, age-appropriate, as soon as you’re sure they can learn the money concept.
You can even make the allowance in a shared account with your child. As cash is being used less and less, young people will have to learn the concept of debit card and virtual wallets anyway.
You can also condition the receipt of the entire allowance to perform certain tasks in the house.
3. Eliminate the wrong spending decisions
It is useful to let the children make their own financial mistakes, but to a certain point.
If you start to feel that they really do not know what they are doing or do they make misleading purchases just to defy you, stop them by invoking the abovementioned parental authority.
Explain this by understanding why it is very important to reasonably think about every financial decision you make.
You can help them by providing them with an age-appropriate educational game, such as Monopoly, for example.
4. If in doubt, let them work
Sure, this is not an option for those children who are small or very small. For teenagers, however, a part-time summer job can have a very positive influence and can significantly increase their financial intelligence.
Moving from zero income (or a modest allowance) to a real salary, even if small, earned at a job in the local supermarket, for example, is extremely important.
Just make sure you provide them with the necessary job search support. They will thank you later.