Money is so important that in reality, we cannot really live without it. It is a necessity, the ultimate medium of exchange through which we meet our basic needs in our daily lives. Having said that all, therefore we should know that money should be saved and spent wisely. That said, financial literacy should not only be learned by adults, but by children, too. Children should also learn the ability to use knowledge and skills for effective money management. Little by little, we, the adults, can teach them the importance of saving money, and the relationship between earning and spending it.
Teach them the concept of earning
While your kids are still young, tell them the notion that money should be earned. Don’t give them a fixed allowance: instead, convince them to do simple or assigned chores before giving them money as a reward. Try letting them earn their own money. They could be honored for accomplishing simple chores inside the house through incentives, whether financially or materially (even candies can work!). This way, kids will value their money more and understand the concept that money should be earned and not just acquired. Tell them that money well earned is money well-spent.
Teach them how to spend money wisely
When your kids have the knowledge of earning money on their own, they will appreciate their money more. If you’re having problems about your kids’ disorganized management of spending their own money, well, now’s the time that you teach them the relationship between their needs, and their wants. You might want to spend some time with them and make some lists of the things that are essential to buy, and the list of the things that are not yet needed, on a sheet of paper. Then eventually, teach them the difference of their needs and their wants by explaining them its importance and how they will have zero percent chance of regrets after buying things they desire. You could teach them and convince them to purchase things that are more essential than the ones that can be bought next time.
Teach them the importance of saving
Your kids should know that earning money doesn’t have to be just for the sake of purchasing. You could teach them to save money for the long term. Banks nowadays offer new and modern ways for kids to put their money in their own savings accounts. Tell them to save, probably half of their allowance every day, and save it until the weekend so that they can deposit it to the bank gradually. You could also use the traditional way of saving, like what they see in movies such as the piggy bank concept and the like. Or you could use the very famous way of saving, the “be-thrifty-way”. You might want to tell them that if it’s not necessary to spend their money, then keep their hands off their money and leave it to the piggy bank. By these, you could teach them the importance of saving and also security concepts about future money expenses.
Through these simple ways, your kids will have the ability to use money carefully and consider the importance of money whenever they undergo money management decisions. Surely with these simple methods of teaching your children financial literacy, they could go a long way.
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