Money lessons should be part of the lessons that parents teach their kids. Of course, it is important to help them be as independent as possible because they will need to stand on their own two feet in the future and this includes being financially prepared to handle a budget. This will help your children to be a well-rounded person when they grow up.
Census.gov states that there are about 115 million families as of 2013 and this means there are a lot of children needing an education not only from school but from home as well. Education starts and is actually cultivated at home. Even before they start learning from their teachers and even their classmates, their foundation will be based on what they get from their parents.
It is not easy to train your child and mold him or her to your expectations. They will have their own specific and unique personality and characteristics so you will have to be the one to adjust. It is important that your children understand the money basics so they will be able to handle their own money when the time comes.
Money lessons can be picked up from school, friends and even relatives but it is best to start them at home. You as parents take on the roles of teachers and to some extent financial experts so you can guide your children in making the right financial decisions. You will not be with them all through their life so the best you can do is to inculcate best financial practices so they can make better decisions in the future.
Teaching children how to handle money
As you should know by know, handling your finances is no joke. Investopedia.com simply defines a budget as managing your income and expense over a certain period of time which is usually every month. Here are a few things you can look into to help you guide your children in the right financial path.
- Teach them the basic. A solid foundation is crucial for their future money making decisions. You can start by letting them know what money is and getting them used to the different types of money according to amounts such as pennies and one dollar. This will help them get used to seeing money and know the value of each.
- Let them appreciate the hard work that goes behind the money. What most parents prefer is to let their children do chores at home and they get paid in return. Some even encourage their children to either get summer jobs or start a money making an activity like a lemonade stand. The idea is that the kids learn the value of hard-earned money and that it does not magically appear in your wallets or inside ATM machines. They need to understand the concept that work equates money so they can better appreciate and use their money in the future.
- Include them in budget planning. When you sit down with your husband or wife to put together your monthly budget, you might want to include your children in some parts especially if concerns them like your weekly allocation for eating out and even their toy budget. A new child can affect household budget but you can also involve them so they can start to understand how a budget works and how they can be a part of balancing it for the whole household.
- Let them take care of one expense item. Once they understand how a household budget works, their money lessons can go as far as assigning one expense item for them to manage. It can be the electricity and ask them to look for ways to lower down the bill. They will now be more conscious of the lights at home which no one is using or the tv being used as ambient sound in the house. You can also ask them to help you manage your grocery expense by holding on to your list and ask them to make sure that you stay on budget. This lets them experience how it is to manage a certain budget item which they can use in the future.
What you need to remember when teaching financial lessons
When you are trying to teach your children how to handle money, you need to anticipate that not everything will go as planned. Here are a few things you need to know to help you manage your expectations.
- They will follow your example. They will look up to you and follow your ways so you better be careful and practice what you preach. If you keep telling your children that they need to watch how they spend their money but you buy the latest shoes without any second thought only because you want to have it, then the chances will be that your own children will follow your footsteps. It is easier to teach them how to close the lights in the room when they are not using it when you are doing the same thing. If you want them to learn to finish their food on their late during dinner then you should also do the same and finish those greens.
- Your children will make mistakes. And they will make a lot of it over time when they are still trying to learn the ropes. You might not remember that when you were still young, you would fall down when you were just starting to learn how to walk. The most important thing in that whole process is that whenever you fall down, you stand back up. Let your children make mistakes now rather than later in their life when consequences are a little harder to deal with. Just as spending on children is not an exact science, your children will make mistakes as well.
- You are not perfect. In fact, no one is so cut yourself some slack when you are teaching your children some important financial lessons. In fact, use it as a challenge to learn as much as you can so you can guide your children’s money lessons accordingly. It will be impossible to learn everything about the financial industry but you can learn as much as you can to be able to teach your children.
- Listen to them because you might learn something from them. You might be bigger, older and more experienced but you might be surprised that you get to learn a few things from your child if you keep an open mind. They see life in all its simplicity and you might learn to uncomplicate a few things in your life to make things a little simpler and easier.
Money lessons for children is an important part of their upbringing and there is no better way to teach them than you teaching them the ropes. They will get a proper education in school that can include money management but you can do a better by giving them the basics and the continuing lessons because you know them better than their teachers. You would know how to cater the lesson according to how they would take it and you can be more upfront with one and a little more indirect with another.