Smart Money Lessons to Teach Your Kids
If you don’t show your children how to manage cash, another person will. And that’s why you need to teach your kids how to handle finances when they are young. There are many ways to give your children the head start you wish you had and set them up to win with money at any age. The money lessons will be different for different age groups. However, before going into that, there are two principles you could teach your kids whatever be their age. They are:
Explaining your income source
At the point when you are showing your children cash, it’s critical to tell them about where it originates from. Cash doesn’t simply originate from the mother and father’s wallet. You need to tell them that when you work, you get paid, and at any point when you don’t, you don’t get paid. The key is to keep emphasizing and demystifying the connection between work and cash.Learn how to mange your money & create wealth, Download your FREE eBook now
Lecturing on the three standards: giving, sparing and spending
You need to teach your children the three fundamental standards with regards to cash — giving, sparing, and spending. Giving is one of the most significant of the three classes since you’re instructing them to feel the effect of helping other people at a young age. That is significant.
About sparing/saving and spending, urge your kid to put aside a portion of their cash to their reserve funds, and some to investing every rupee they get paid. Advise them that once their cash is gone, it’s gone. If they want money, they will need to earn it. These standards will teach them not to spend frivolously.
Now, how do you teach children of different age groups about money?
Money Lessons for kids below 7 years
Give them a clear jar to save
The secret stash is a good thought; however, it doesn’t give kids a visual. At the point when you utilize a see-through container, they see the cash building. For instance, recently, they had a five rupee note and a few one-rupee coins. Today, they have a five rupee note, two five-rupee coins, and a two-rupee coin. Talk through this with them and overemphasize that their money is compounding.
Be a model
An investigation by the University of Cambridge found that money management in youngsters are shaped when they are 7 years of age. Little eyes are watching you. In case you are swiping your credit card each time you go out to the mall or the market, they will in the long run notice. Or on the other hand,if you and your life partner are talking about saving cash, they will notice that as well. Be a solid model for them and they’ll be substantially more liable to follow it when they get more seasoned.
Tell them that everything comes at a cost
You must do something more than just stating, “That car costs Rs. 500, dear.” Help them snatch a couple of rupees out of their container, take it with them to the store, and genuinely hand the cash to the clerk. This straightforward activity will have more effect than a five-minute talk.
Money Lessons for a pre-teens
Teach them about opportunity cost
As you might know, opportunity costs represent the benefits an individual might miss out on when choosing one alternative over another. Teach this to your kids. That’s just another way of saying, “If you buy this toy, then you won’t have the money to buy that Spiderman T-shirt.” At this age, your kids should be able to weigh decisions and understand the possible outcomes.
Give salary, not allowances
Don’t just give your kids money for living with you. Pay them salary based on chores they do around the house such as taking out the trash, cleaning their room, or helping you wash dishes. They will then understand that money is earned—it’s not just given to them.
Note that when you allow your children to handle money,they will commit errors.However, they should commit those errors under the security of your rooftop.
Avoid impulse buys
“Dad, I just found this Avenger video game. It’s perfect and I love it! Can we buy it please?” Does this sound familiar? This age group knows how to make impulse buys—especially when they are using someone else’s money.
Rather than yielding to such impulse buys, let your youngster realize they can utilize their well-deserved bonus to pay for it. Be that as it may, urge your youngster to hold up in any event daily before they buy anything over $15. It will probably still be there tomorrow, and they’ll have the option to bring in that cash choice with a level head the following day.
Stress the significance of giving
When they begin saving money, be certain you show them what is giving to others. They can pick a religious cause, a charity, or even somebody they know who needs a little assistance. In the end, they’ll perceive how giving doesn’t simply influence the individuals they provide for, it makes them feel good too.
Money Lessons for Teenagers
Teach them to be content
Your high schooler presumably spends a decent part of their time gazing at a screen as they live aninternet-based life. Furthermore, since they’re on the web, they’re seeing the life of their companions, family, and even complete outsiders! It’s the speediest method to welcome the comparison trap. You may hear things like:
“Father, Rahul’s folks got him an SUV! Why I need to drive this compact car?”
“Mother, this young girl at school got the chance to celebrate her birthday at The Oberoi. I need to do that as well!”
Happiness begins in the heart. Tell your teenager how to be content with what they have.
Give them a bank account
When your child is young, you ought to have the option to set them up with a straightforward bank account. This takes money management to a higher level, and will (ideally) set them up for dealing with a lot more money when they get older.
Instructing your youngsters about cash at any stage is going to require some serious energy on your part. It won’t generally be simple. In any case, if you need your kids to realize how they can effectively handle money, taking the time out now will be surely justified, despite all the trouble it may cause.