The fact that schools don’t teach children about money lessons is surprising- money plays such a big role in our lives. Teaching growing children the right financial lessons can really help shape them into adults that are wise and make smart money decisions.
And guess what- you, as a parent, can actually do a lot to make sure that happens. Read on to discover 7 important money lessons you need to start teaching your fast growing kid.
Make the Right Choices
Making the right choice is important, but even more so when it comes to money. Teach your little one that when he makes the right choices about spending the money that he has, he’ll be able to reap more of its benefits. You could encourage him to set goals regarding his money, sit down with him and help him decide about where he could spend it, and how much he should splurge on.
Money Doesn’t Grow On Trees
Your little one may be eyeing all those bills that pop out of the ATM machine but may not be aware of the fact that money is a finite resource. Help him understand that one has to work to get paid.
Save & Invest
Encouraging your children to save and invest their money is one of the most important lessons. Teach your little one that the more he’s able to save, the faster he’ll find his money growing, and even small amounts add up to a big sum over time. If there’s a new expensive toy that your kid has been eyeing, getting him to save for it is a great way to teach him the concept.
The Waiting Game
Introducing your kid to the concept of delayed gratification can be powerful. It’ll help him understand how it is important to spend money wisely, and that getting everything that they want instantly isn’t possible. Reinforce the idea that waiting to purchase that something that he’s been eyeing is actually better- he’ll be able to value the thing more, and will learn about the cost behind getting his hands on it.
Create a Budget
You’re never too early to teach your little one about budgeting. Of the money he gets, you could encourage him to sort it out into different categories depending on his spending habits, and have a certain amount reserved for savings. When he learns to create a budget, he’ll learn one of the most valuable lessons in money management.
Another important money management skill children need to learn is to keep track of the money that they have, and that they spend. Encourage your little one to keep record using a notebook or on his computer, and record his earnings and spendings. You might even want to get him to store his receipts and bills to take things up a notch.
Money Isn’t Everything
Last, but definitely not the least, teach your little one that money isn’t always everything. It might be important, but there are other things far more valuable. Remind him that money is a tool to help him make purchases, but it isn’t enough for him to have a fulfilling life. Get him to understand how his relationships, friends, and family are essential to a happy life, and money is a part of the equation, not the entirety.
Teaching your kid these exceptionally simple concepts (and taking the help of certain books and reading material to reinforce them) can go a long way in helping him become money savvy at an early age itself, which will help him make smart financial moves as he grows up.