Brush your teeth, eat your greens, drink plenty of water, don’t talk to strangers, be kind to others. As a parent, you want the best for your kids and that includes teaching them important life lessons. You want them to be safe and secure and have the knowledge to make the right decisions. But what about teaching your kids about money?
Teaching children about money can be challenging in today’s digital age, where cash is becoming less prevalent and instant gratification is the norm. However, it’s important for children to understand the value of money and how to manage it responsibly. As a parent or guardian, you can help the young people in your life develop good financial habits from an early age. One way to do this is by finding fun and engaging ways to educate them about money.
In this post we give you some tips and tricks to get you started.
The Importance of teaching children about money
Teaching children about money is important for their financial understanding and overall well-being as they get older. Money plays a significant role in our daily lives and it’s essential that children understand the value of it and how to manage it responsibly. When children learn about money at a young age, they develop important skills such as budgeting, saving, and making wise financial decisions.
One of the most important things children should learn is the difference between wants and needs. They should understand that they can’t always get what they want, and that it’s important to prioritise spending on things that are necessary. This is an important concept that will stay with them throughout their lives and help them make better decisions.
Teaching children the importance of saving is also important. Starting early can help children to develop the habit of saving, which is essential for achieving financial goals. Once your child understands the concept of saving, teaching them about investment is also possible, with the support of investment apps for kids. Teaching children to set financial goals, whether it’s a toy they want or college education, can also be beneficial.
Should I be talking to my child about money from an early age?
It can be beneficial to start teaching children about money from an early age, as it can help them develop good financial habits and understanding of financial concepts. This can include basic money management skills such as budgeting, saving and spending, as well as more advanced concepts such as investing and credit. Additionally, teaching children about money can also help them understand the value of work and the relationship between earning and spending.
5 exciting ways to teach your kids about money
Use Pizza night to teach budgeting
Use pizza night as a metaphor to teach budgeting. During family pizza night, explain that the pizza represents the family’s monthly budget. Just as the pizza is divided among family members, the budget is divided among different expenses. Some expenses, like the mortgage, may get a bigger slice of the budget while others, like food, may get a smaller slice. Also, make them understand that money is limited, just like the pizza and once it’s gone, it’s gone.
This can be a fun and interactive way for children to learn about budgeting.
Play a game
Playing games can be a fun and interactive way to teach your kids about money management, some popular games include:
- Monopoly – a family favourite that teaches players about managing money, buying and renting property, and learning about different places.
- The Game of Life – this board game mimics real life, where players have pay days and buy houses as well as other things along their life journey.
- Financial Football – this one is recommended by experts and teaches financial concepts and money management skills through an interactive, fast-paced game that is free to download online or via the app.
Visit the grocery store
A trip to the store is a great way to introduce children to the concept of money and how it can be used. If they have some pocket money or birthday money saved up, take them to the store and let them spend it on something they want.
Show them how to find the price of an item and see if they have enough money to buy it, or if they need to save more or look for a cheaper item. This can help them understand financial independence and budgeting.
You can also set up a pretend store at home with toys or other items and make price stickers for them. Your child can select and pay for the items with play money or real money, counting out the money and receiving change. Take turns being the shopper and the shopkeeper to make the game more interactive. This can be a fun and educational way to teach children about money and shopping.
Spend a day paying only with cash
Spending the day using only cash can give kids a hands-on understanding of the relationship between money and goods. Take them shopping to buy some items at the store and have them prepare the money, give it to the cashier and receive and check their change.
This can be the perfect opportunity to teach them how to count money and how to use it in everyday life.
Open a bank account
Many children are excited about the opportunity to manage their own money, and many banks now offer accounts specifically designed for young people. These accounts may provide a basic level of access online or through an app, and some even come with a prepaid card that prevents children from spending more than they have in the account. In addition, there are opportunities to open a children’s investment account to help them with investment longer term for their futures.
By opening an account, parents can help instil responsible habits that will benefit their children as they start to build a credit history as adults. This can be a great way to teach children about financial responsibility and money management.
There are many different ways to teach children about money, such as using games, going to the store, spending a day using only cash, and opening a bank account specifically for kids. By teaching children about money, they can understand the value of work, budgeting, saving, spending, and even investing and credit.
Parents can make this learning interactive and fun to make the kids more engaged and allow them to have a better grasp of the financial concepts. It’s never too early to start teaching your children about money, and it will be a valuable skill that they will carry with them throughout their lives.