3 Effective Money Lessons To Teach Your Kids

Children possess great mental ability to imitate, observe and absorb things from the surroundings (1). Everything they absorb from the vicinity, congregate to shape up their behavior and life in general. This phenomenon is also applicable to money traits. Money experiences as kids, define their relationship with money as adults. Thus, it is imperative that parents pass on positive money traits like budgeting and planning, instead of negative money behaviors like impulse shopping.

1. Earn Your Money: The very first lesson to teach is to value the hard-earned money. Expose your little one to simple money earning opportunities like getting a bit extra pocket money for their A-grades or for taking up little household chores etc. Help them understand the efforts one has to put in to earn money. It is a way of developing healthy work ethics.

Simultaneously, maintain good relationship with your money so that your child observes and learns how to value and manage finances. Seek expert advice from online advisory like ArthaYantra to put your finances in order.

2. Plan out A Budget: Involve your child in creating a dummy budget for mini shopping. The whole process should help the little one understand how much can be spent, how much can be saved. Gradually, involve the kid grocery stoppings or party stoppings. You will soon be surprised to see how your kid develops financial concepts like budgeting, savings, financial planning, etc.

3. Save Towards Goals: Saving is a habit that has to be built from the very early years of life. Help your kid open a bank account and let him save the pocket money. Guide the child in identifying little goals like buying a favorite book, a toy, etc. and build savings towards these goals. Encourage to build fund for higher education or music classes or summer camp. Teach prudent ways of multiplying savings to, if your kid is a teenager. You as a parent are definitely there to look after the kid’s education needs. However, such finance knowledge/education helps kids develop positive relationship with money at a really early stage. At the same time, you can devote savings to lead a self-sufficient retired life.

In conclusion, simple money management lessons learnt early in life, helps an individual become a successful saver in the future. Parents need to be careful about the unspoken messages they could impart in kids. In simple, practice the best money behaviors and help your kids follow your footsteps.

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