Thinking about money lessons for kids during the pandemic might be the farthest from your mind at the moment. As a parent, your focus could be in making sure that they are protected and shielded away from this pandemic. Their health and safety are of utmost importance. But this is also a good opportunity to help your children the importance of financial management regardless of age.
Society at present is concerned with public health and picking the economy back up. Both of which are quite daunting at this point. Public health and primary care facilities are taking the brunt of this pandemic. As more Americans get sick, hospital capacity is maxed out. This can make it challenging to receive quality care in the face of room shortage and worker fatigue.
The economy also has to slowly pick back up from business closures due to the pandemic. The WSJ even share that unemployment could potentially be higher than the Great Depression. This makes it all the more important to impart money lessons for kids. You need to find make sure that they are able to understand what is happening so they can adapt when get older.
It will definitely be quite a challenge to add this to the things you have to focus on. But if you are a parent, looking out after your children is an on-going role. From the moment they come into your life and even when they have lives of their own, you will not stop being a parent. And with the current economic situation, you can use this time to help them gain a better appreciation for money management.
Have the talk
Money lessons for kids usually start by giving them the “money talk”. Take note that you might have to have more than just one talk with your children. This will also depend on what age they are in. You can start with a coin bank telling them they can put in change they find around the house. This trains them to create the habit of saving money.
When their level of understanding progresses, you can have money talks with your children every now and then. You can show them how you budget your food expenses for your family’s meals. This could help them understand the decisions you make when it comes to food at home. You can also choose to bring them with you when you buy your groceries and teach them along the way.
Consistency is a big factor when you talk to your kids about financial management. You cannot expect them to remember and build a habit with just one conversation. There are a number of opportunities to talk to them about money. You simply have to identify these situations and be sure to make the most out of them.
You can say NO
One of the key concepts you have to embrace is the fine art of saying “no” to your children. This forms an integral part of the whole process. Teaching money lessons for kids at this time would need a healthy dose of discipline. You cannot always bend and agree to what your children ask from you. As an adult, it falls on your lap to make sure that they understand that there are limitations.
It might seem to be a harsh approach considering the situation at the moment. While everyone is trying to get ahead of their finances due to the health crisis, you could be tempted to give in to requests from your children. You might think it will help shield them away from what is happening. But this could actually be doing them more harm than good.
They need to learn that they cannot have everything they want. If you give in to every request they make, they could grow up thinking they can simply ask you for anything. One important part of this equation is letting them understand why you are saying no. They should know why you are refusing what they want so they can learn from it.
Strengthen their financial basics
One of the reasons why you need to talk to them about money management and explaining a “no” answer is for education. If you want to provide money lessons for kids, you need to help them form a solid foundation with their basic financial knowledge. Having a clear grasp of the basics can help them make better money decisions in the future.
Take how credit cards work and understanding them at a basic level can help people make smarter decisions. If your children understand that a line of credit is essentially borrowing money from the bank at high interest, it can help them weigh their decision. They can choose to simply save up for their purchase rather than using their cards.
The importance of having a household budget is also one of the basics you need to impart to your children. The pandemic is actually an excellent opportunity to highlight just how important it is to have a comprehensive budget at home. Show them how having a budget can help you make informed money decisions.
Define needs from wants
As soon as you become serious in teaching money lessons for kids, you have to include the difference between wants and needs. The younger they are, they are more inclined and focused on their wants. From toys to food and even games, their sights are honed in on the things that will give them their happiness.
They might find it difficult to grasp the concept of waiting, saving up for a purchase, or having to choose a more affordable option. You need to be there for them to guide them and help them understand the difference between a want from a need. Buying a toy versus buying food can be a great example of need and want.
A toy can be a want while food is always a need. You can use that to help drive home the point of prioritizing their needs first. If there is something they want, sit down with them and go through it. Help them understand why it is classified as a want and not a need. This way, you help them think for themselves.
Include them in big purchase decisions
One of the best ways to approach money lessons for kids is to include them when making big purchases. Say if you are saving for a new car to replace the old one your family has been using, you might want to include your kids into the conversation. They will understand that buying a car is a big decision not to be taken lightly.
For one, buying a car is not an impulsive decision. There needs to be a valid need for high-ticket items. You can also show them long it will take for you to save up for just the downpayment on the item. If they can understand the concept of a credit score, you can also point out how this affects a car loan. The higher your score, the lower the interest rate. This means you get to pay a lower monthly payment because you worked on your credit score.
Money lessons for kids at a time when the health crisis is still sweeping the nation is a great way in preparing them for the future. The key is being open and spending time with them especially when they start asking questions about money management.