Financial literacy is one of the most important things kids should learn early. However, some parents worry that talking about money might bore their children, or their kids will find the topic too complicated.
Nevertheless, the habit of saving is vital and must be established at a young age. So, whether they find it exciting or challenging should not be an issue for parents. They need to start teaching their kids how to properly spend money at the earliest possible time.
Helping form money habits for kids and teens at an early age is one of the ideal ways parents can teach them about budget or budgeting, setting financial goals, and saving. It allows parents to teach their young ones the practice of delayed gratification – an important skill that encourages positive behaviors, such as giving and sharing.
What Can You Do as a Parent?
Teaching your kids the proper way of spending money allows children to understand the value of money, an integral part of our daily lives. Money is needed for food, clothes, education, healthcare, insurance, utility bills, vacations, and other essential transactions and activities. Children do not pay the bills yet or do the grocery shopping, but parents can train them to do activities that involve money.
Here are a few examples of how you can do this:
- Use an online chore system or app that allows you to assign chores to your child and monitor their progress. Reward your child with a “salary” for every completed chore.
- Schedule a payday when your kid’s completed weekly chores get paid. Open a bank account for your child and transfer their salary from your account to theirs.
Other activities you can teach your kid include donating money using their rewards or salary, saving for and buying a toy or whatever item they want and investing their money in real stock.
To give you more detailed ideas on how you can help your kids learn to spend money wisely, check out the infographic below.