Teaching your Children about Finances
Your kids will definitely learn a lot of subjects in school such as mathematics, science, history, and the arts, among others. However, finances and money matters are very difficult to learn because they are not included in the regular school subjects. Therefore, you should take it upon yourself to teach your kids about money matters. Some parents might think that their kids will not be able to learn anything about finances because they are still too young. On the contrary, it is actually a great idea to start teaching them about money matters as soon as possible. It is never too early to start teaching your kids about money so that they will get a lot of practice at a very young age. Of course, you would need to teach them the most basic ideas about finances because they will definitely not be able to understand the more complex terms about the stock market or other similar theories. To start with, you can always teach them the value of money and why it is very important to save. Whenever they want something, it is also advisable to show them the difference between what they want to buy and what they need to buy. Although these are actually very basic skills, these theories are what they would really need to use when they become adults.
Try to talk with your children about specific situations to make them understand the value of money in a better way. For example, if they want to buy a specific toy, help them think of different ways on how to earn money. If you just give them money to buy everything they want, they will definitely think that money is very easy to get. It is also a great idea to have a thorough discussion about how much they would need to save every week in order to come up with enough money to buy that particular toy. You can also help your kids earn some money by offering some simple jobs such as cleaning the house, cleaning the backyard or selling lemonade to your neighbors.
It is also very essential to show the value of saving. Always encourage your kids to save, rather than waste all their money to buy different kinds of toys every week. Give your child a glass jar or piggy bank where he can place his money and watch it grow after several weeks. But if you truly want to help your child get exposed to the real financial world, it is an excellent idea to give them their own bank accounts. There are a lot of banks in the industry that offer junior savings accounts that have interest rates. These savings accounts are also ideal for children because they do not have a lot of charges, compared to regular savings accounts. And while you’re at it, you might also want to show your children how to budget their weekly or monthly allowances, to make sure that they have enough money to last the entire month.