Some parents make the mistake of just giving their children money and not teaching them the value of it. Children should be taught about money and their own personal finances from a young age. This will give them an appreciation for money and how to earn and save it. A child who knows how to work with money will do well in the world.
Try to teach your children the following in fun and interactive ways.
Money has to be earned
It is vitally important that children not just get money. Compensate them for chores they do and according to school work and results, for example. You can choose which method will work best for you children, but they must understand that money doesn’t grow on trees and that it needs to be earned.
You should save for the things you want
Saving is an important habit to learn. If you learn this from a young age it may be easier when you’re older. Teach your children that they will not just receive things. They need to save money to buy the things they want and to prepare for their future.
Don’t make debt unnecessarily
When children really want something they may go and borrow money from a friend or ask to borrow from you. When you’re an adult, debt is part of life and often the only way to get by. However, children should learn that debt is not a good idea if you cannot pay it back, Teach them to understand what debt means and that you pay more money back than you spent.
Don’t spend more than you have
You can start teaching your children about budgeting early on. Let them draw up their own budget. They need to see how much money they get every month for doing chores and with their allowance. They must then understand what expenses are and how to plan for them.
Lastly, they should understand that frivolous or unnecessary spending will lead to them not having any money for the things they really want. If you can instil these things in your children from a young age, you will be raising a child with money savvy and good financial habits.