We spend money every single day, and as parents, it is up to you to teach your children financial literacy. We might not like to talk about our finances, but teaching finances to your child at a young age can help them develop a healthy understanding of money for the future. The following tips are just a few ways you can boost your child’s understanding of finances.
Children today are much more perceptive than we often give them credit for so there is never a wrong time to start talking to them about money. Whether it’s walking them through a transaction at the grocery store or just talking to them about what items cost and where the money comes from can help them understand more complex money issues when they are older.
Start a Bank Account for Them
Whether you are dropping extra chains and dollar bills into a jar or depositing money into an account at a bank, starting a bank account early will help develop your children’s savings habits. Choose an account at a bank that has a program that will teach your child about money. Look for accounts that do not have additional fees, come with educational materials and can be viewed online.
Set Up Savings Goals
Digital transactions have made it harder to demonstrate how much an item costs which has made teaching a child to save money harder. Teaching a child how to save up for the item they want will help them build positive behaviors towards saving money. When they are looking to purchase a big ticket item, set up a savings goal so they can see what it takes to save money.
Implement Pocket Money Spending
Earning an allowance is going to help your child become comfortable managing their own money. But, as quickly as a child can collect their allowance, the quicker they are coming up with ways to instantly spend it. Setting up a pocket money system with your child will teach them how to be responsible with their money. This system allows the child to keep some of the money they earned through allowance while saving the rest of it.
Play Money Themed Games
Studies have found that activities that show instead of telling how something works help children understand the concept better. Children want to have fun, so playing age-appropriate games like Pay Day, Cashflow for Kids or Monopoly Junior will help teach them about spending and saving money.