Money are a touchy subject when it comes to explaining to children. You don’t want to make them think the world is only about cash. So what to teach your children about money at an early age?
Some children have an entrepreneurial spirit and from very young begin to collect items with the idea to wait for their value to rise. Other children like to do chores for cash. But some kids don’t really care about money at all. As with many other things in life, it is about balance. You don’t want your little ones to go crazy about money, but you don’t want them to thing things just fall from the sky with no effort.
For example you should tell them they don’t have to spend all of their money at once. Keeping some money can be just as rewarding as spending it. Teach them that sometimes it is better to set goals before spending. For example, that new cute stuffed animal. It costs 20 bucks and your child has them. But why not first earn another 20 dollars first and then buy that stuffie? It can be even more rewarding and pleasant.
Find someone who can be like a money mentor. It would be good if it’s you or even better – a close relative who is good with money. A relative is better, as it removes the notion that this is the parent teaching the child something, but actually makes it more exiting as the child is learning new stuff from someone else. He or she can give out extra spending tips, saving tips, counting tips… Maybe when the time is right, your relative can open the door on stocks and other financial wisdom that will show how money makes money.
Also, don’t hide the financial planning of your family from your children. Instead, bring them in. Show them how you make the family budget, how you prioritize spending and costs. You can even turn it into an educational game (for example, let’s find a way to save an extra 10 bucks this month). Take your kids to the bank, too. Let them see and get to know this new world.
Also teach them that it is not only practical, but cool to watch your cash flow. Keeping tabs on the transactions and making sure more money are coming in than are going out. It will help teach budgeting skills, too. All of this may seem like a challenge for children, but they can surprise you. Start small, be practical and show them that money are not scary, not that difficult to manage and not something that should be obsessed about all the time.
