Children are very receptive to new knowledge, so childhood is the best time to learn about money. They are free to make mistakes without any severe consequences and can also be rewarded easily. If you’re looking to teach your children about money, here are nine proven techniques to try.
Get them a piggy bank.
Piggy banks are some of the oldest tools for teaching kids how to save. Children can start with pennies and dimes, loading them up little by little. As a parent, you can also put a twist on it by getting a clear piggy bank. That way, your kids can watch their money grow.
Lead by example.
If you want adoption of the saving mentality, you should consider getting a piggy bank yourself. Every time you deposit money, your kids take mental notes and learn to do likewise. A savings account would hold more money, but it’s only useful if your kids understand what you’re doing.
Give them allowances.
An allowance can mimic the financial situation that kids will experience as adults. It’s already a widespread practice, with four in five Americans believing that kids deserve an allowance. You can also cultivate a habit of work by giving an allowance based on their chores, grades, and overall behavior.
Play money games.
Monopoly is one of the most popular board games because of its fun and educational features. Playing monopoly with your children can teach them a lot about saving, investing, and even the power of negotiation. You can also invent your own home games for an immersive experience.
Mimic real financial situations.
Once your kids have started earning, saving, and spending money, consider taking things up a level. Teach them about taxes, debt, and bills. These are unavoidable for adults, and the sooner children understand the concepts, the better for them. With older kids, you can even show them how you pay your taxes and the various tools you use to file, like Taxfyle’s income tax calculator (https://taxfyle.com/income-tax-return-calculator)
Create a budget together.
Give your kids a chance to practice what they’ve learned by creating a budget for a family event. It’s an excellent opportunity to teach about scarcity and the concept of forgoing one thing for another. Having to make tough choices, instead of getting it, can also help prepare them for life’s curveballs.
Here’s another opportunity for you to lead by example. Sometimes, it’s hard to give when you think you don’t have enough for yourself. But then, acts of kindness can go a long way to support people who need help, and it will make your children better people.
Teach them to start a business.
A penny saved is a penny earned, but it has no compound interest. Show your kids that profits and dividends can help grow their money faster than any piggy bank ever could. Their business could be as simple as a lemonade stand or buying candy wholesale and retailing to their friends.
Teach them how to splurge.
One of the perks of adulthood is being able to do whatever you want with your money. Even though you’re probably getting things they want for them, it’s still a good idea to teach the concept of reward. It’s okay to set aside some money exclusively for fun and pleasure. After all, no budget is complete without a personal treat.