Children learn math, reading, writing, and science at school. But where do they learn personal finance? There are reasons so many adults today deal with financial difficulties. Kids were never really taught how to handle their money.
As a parent, it should be one of your goals to teach personal finance to your children as early as possible. By doing this, you can be sure that they’ll be responsible for their money when they grow up.
In this article, Kiddie Kredit shares some tips on how you can teach your kids to handle money the right way:
Give Your Kids an Allowance
One of the best ways to teach children about money is by giving them a weekly allowance. Your kids should be allowed to handle money and learn how to manage it. This will teach them the concept of budgeting, saving, controlling their spending, and more.
Their allowance need not be big. It should depend on what you can afford and also what you believe they can be responsible for. Think of it as a paycheck and not a gift – meaning they should earn their allowance, whether through academic achievements or doing chores around the house.
You can use apps like Kiddie Kredit so they can see their progress with their chores and learn the credit system at the same time.
This should be discussed as early as possible. Also, establish what the kids are allowed to purchase with their money and what things you’re going to buy. They should also understand that they do not have unlimited funds, meaning, once they’ve run out of money in the middle of the week, they won’t be getting more.
Encourage Them to Open a Youth Savings Account
If possible, and when they’re old enough for it, take your child to the bank so they can open a Youth Savings Account and discuss with them the importance of setting aside a fixed amount of money to put into their account monthly.
You can also explain the idea of earning interest, as well as the difference between a savings account and a checking account.
An alternative to this is to have a home bank where your child can “deposit” the amount that they want to save weekly. They can do this at the start of the week when you give their allowance or at the end of the week.
Include Them in Your Discussions About Money
Most parents don’t like the idea of including their kids when discussing issues about money, especially when there are financial difficulties. They want to “shield” their kids from something that they believe is a “harsh reality.”
It’s up to you to decide just how much you’ll tell your kids, but you might want to include them in discussing things like what to include in your weekly groceries. Don’t forget to let them list down the prices or compare similar products. You could also let them decide when purchasing their stuff, like whether they want two cheaper toys or one more expensive item.
Raising financially literate children is important. You want to ensure that your kids are going to be responsible with their money when they grow up. By starting early with their financial education, you are equipping them with the right mindset towards saving and being smart with their spending.
If you want your kids to develop financial knowledge, you should try useful apps like Kiddie Kredit that can help educate children on how the credit system works. This app can also help them track their chores and check their results. Download the mobile app now!