Being an adult, at some point, we have to face many financial problems just because of our poor money management. We will be stuck with our rent payments, credit card bills, and many other bills, so if we want our children to not face the same situation in their life we have to start teaching them about financial education as soon as possible.
According to David Whitebread and Sue Bingham of the University of Cambridge research, our financial habits are set by age 7. If you do not give proper education about money management to your child at the right time, it will be harder to point your child in the right direction.
WE SHOULD MAKE THEM EARN THEIR ALLOWANCE
One of the most important lessons we should give our children is how money is important for us and how it plays a vital role in our day-to-day life. We should teach our children that money is a finite source. Giving some weekly allowance to our kids can lead them to teach budgeting skills by itself. It would be making them earn that money by doing household chores. This method helps a lot to understand the connection between income and personal efforts which helps a lot at a young age.
ENCOURAGE THEM TO PART-TIME JOBS
High school can be a busy time for your child as they have many homework and extracurricular activities. Still, if they spare a few hours to work at a coffee shop or anything else, they’ll probably be better for it. you don't need to wait until they're old enough for formal employment, instead, you can teach them about financial literacy at an early age. they will earn on their own and spend their own money. so that they can learn how to manage their money effectively.
At the time when they start earning you can also help them to open a savings account or start their own startup with some of their own earnings. That's another life lesson you can help them learn early.
TELL THEM TO CONTRIBUTE TO PURCHASES
Every parent knows what it's like to take their child to a shop or store and they just start requesting various toys, dresses, chocolates, and video games. It is not a big deal because younger kids do not understand there’s only so much money you have each month to put down on essential purchases.
You have to make a demand to contribute money for these non-essential items. Tell them that they also have to pay half the cost for a new toy or dress. so that your kid will understand better what things actually cost. In this way, they also learn how to save money and pay for a bigger purchase and that they have to prioritize the money, just as we do.
MAKE IT A FUN GAME
Learning about finances should not be boring. Even board games can help kids to learn the importance of money.
Payday is the best way to teach your kid how valuable money management skills are.
They can also purchase items at the end of the month and also take loans from their parents but only when they do not have to pay some other bills. otherwise, it will create a lot of problems to manage their money.
BY OPEN A SAVINGS ACCOUNT FOR YOUR KINDS
The piggy bank in a house is a useful savings vehicle for kids, but when they cross elementary school, you should open a kids' account at an actual bank. It is the best way to teach your child the importance of gradually building up their balance, and it will help them to learn about the banking industry.
You can also give them a kid-friendly debit card. A kid can earn money through household chores and then use the cards to purchase online or at a store according to them . by this method your kid will soon realize how quickly their account balance decreases when they overdo it.
TEACH THEM ABOUT THE STOCKS AND INVESTMENTS
One of the most important success keys in our generation is to learn about stocks and investments. They should know that financial health is knowing how to invest wisely in stocks and bonds.
If you teach your kids about stocks and investments then your child can learn these most important tools and also they start their first full-time job, so much the better.
HAVING HONEST CONVERSATION ABOUT MONEY
The most important thing you have to do with your kid is to tell them openly about your family finances.
If you openly tell them about your financial condition especially when you are jobless your kid will take care of how to spend money effectively.
It doesn’t mean you need to share your bank statements, but you find it helpful to talk about the budget and cut down on nonessential things.
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