But there’s one very crucial thing parents tend to forget: teaching kids financial literacy.
Sadly, most schools don’t focus on teaching personal finance. We are left on our own to experience and learn how to budget or save money.
Can you imagine what the world would look like if people are financially literate? How much difference would it make if we started learning at a young age? Aside from academics and technical skills learned in school, let us teach our children the proper attitude towards money. It’s always best to teach them while they’re young.
So, how do we teach children about personal finance? Here are eight practical tips to help you with that.
Start with a piggy bank
Make learning fun! Bond with your kids by creating and decorating piggy banks. Teach them how to save. Every penny counts! Encourage them by giving them something to look forward to if they fill it up.
The board game “Monopoly” is a timeless classic. It teaches us how to strategically use our money. It lets us experience wealthiness and bankruptcy. By exposing our kids to this game, they will appreciate the value of money and investment.
Or perhaps, you can simply do role-playing games. For example, use fake paper money and pretend you own a store and your kid as a customer then do a reverse role. This will introduce them to the concept of buying and selling.
Another idea is to bond with each other through storytelling! Read children’s books about money. Illustrations and drawings help parents capture kids’ interests. Check online or visit your local library for a vast selection of stories.
Bring them with you when you shop
Show your kids the price tags. Which one suits your budget? Let them compare prices and explain to them the factors to consider when buying an item. Is it just the price? The quality? Involve them by giving them informed choices.
Also, through shopping, you can introduce them to the concept of needs and wants. Let them know what should be prioritized. You can tell them that they can’t always buy the things they want.
Make shopping educational, too by letting them exercise their mathematical skills. Have them add and subtract prices. With this, they will get the idea of budgeting.
Give them allowance
By letting them handle their own money, you instill them the value of responsibility. Have them decide where to use their money. Did they buy toys instead of buying lunch? What was the consequence? Did they get hungry? Explain to them that every money decision they make has consequences. It is through these experiences with the help of your guidance that they will learn.
Open a savings account
Believe me, they’ll get excited when they see their names on an atm card or a bank passbook! This will motivate them to save. Assure them that they can deposit even a small amount of money in the bank. The goal is to have them develop the habit of saving.
Lead by example
You are their role model.
Show your kids that you can handle your finances well. Show them your bank accounts, insurance, and investment certificates. Inspire them to be like you and challenge them to exceed your savings. Advise them how you did it.
If you don’t have bank accounts, show them your efforts of maximizing your available funds. Show them your budget list and receipts. Let them notice that you’re sticking with your budget everytime you go shopping and do groceries.
Let them earn their own money
Is there anything they want that is not in your family budget? Ask them to work for it. Let them understand that they can have what they want if they can work hard and save money for it.
Give them options, to. Teach them other ways to earn. Perhaps you can encourage them to sell old toys, books, or clothes. This will teach them how to be resourceful in earning money.
Help them with goal setting
Ask your kids what are the dreams they want to pursue.
Goals are great because they can be a source of motivation and inspiration. Show them how they can reach their goals. Always look for teachable moments and encourage them to pursue their dreams while staying away from bad debts. Because in the end, it is bad debts and irresponsible handling of money that takes away our dreams from us.
It’s tough to teach children financial literacy because money is often a sensitive topic to talk about. But be persistent in teaching them. Have fun until they learn to get the whole point of saving. Aside from helping them go through college, secure their future by teaching them about financial freedom. They will thank you for it in the future.