When we were young, we all wanted to buy outrageous things like ponies, helicopters, and our very own limousine. The last thing on our minds was how to properly save money and make sure that we have enough saved for a rainy day. This pretty much puts things into perspective. Talking to children about money may not be the easiest conversation.
Teaching Children About Money: 5 Crucial Mistakes to Avoid
When you talk to your children about finances and money matters, there are crucial mistakes you need to avoid to make sure that they do not grow up ignorant about how to handle money. In this day and age, they need to be aware of how money affects their lives and overall well being. Here are a few mistakes that parents or guardians should avoid when they try to teach their children about money.
1 - Forcing Them to Save
If you have children, you will already know that if you want them to actually do something, you should not tell them outright what you want them to do. If you want to encourage them to save money, it is probably not a good idea to force them to do this. Instead, you should tell them the benefits of what a savings account can bring them and how it can benefit them in the long run.
2 - Thinking They Might Not Understand Financial Concepts
Although children will not deal with their own debts, loans, and mortgages until they will be older, teaching them the basic concepts will help them understand them in the future. Children are smarter than they let on, and if you sit them down and explain the basics of these financial concepts, they will listen and understand.
3 - Not Taking Your Children Shopping
Taking children shopping will let them see just how money works and how much of it is needed in a single day of regular existence. It will also help them understand why you sometimes need to say no to their wants because you need to spend the money on specific needs. It will help them understand that the household will not run properly if the budget is not followed.
4 - Neglecting to Teach Them About Debit and Credit Principles
Debit and credit may sound difficult to teach to children, but they will understand them if you use terms they will relate to. Explain to them how much money comes in and how much of it needs to be spent on needs. It will teach them that the money you have in the bank is not an infinite amount and you will be in trouble if you spend too much or live beyond your means.
5 - Not Teaching Them About Charitable Giving
Lastly, it is equally important to teach them that money can also be shared to the less fortunate. Even if you have money and food on the table, it doesn’t mean that everyone is in the same situation. Teach them that part of your budget should be allocated to give to the poor, especially if you can spare it.
Although talking to children about money may not be the easiest and most straightforward conversation, teaching them the value of money at a young age is essential. If they are able to grasp the concept of money and how important it is to have savings set aside, they will be able to handle their finances much more effectively when they will be older and have money of their own.
If you are interested in teaching your children the importance of financial literacy, Kiddie Kredit can help you. Kiddie Kredit is a mobile app designed to educate children on a credit system by completing chores. Get your children to learn responsibility and learn the value of money in the process. Download the app now!