Kids nowadays have become smarter and more imaginative. This may be due to their exposure to technology. Hence, they can surf anything anywhere and get information about any particular subject. They are tech-savvy today, are more attentive, and are good learners. All we need in these times is to create a bright and productive path for their research, abilities, and intelligence in every way. However, money management lessons for kids are very important and it is something that every parent must teach their children.
Why Go For Money Management Lesson For Kids From Childhood?
As the facilities have expanded for all the children, their resources have transformed from books to the entire libraries. Famed as Google, a great search engine, absolutely need no introduction. It becomes essential for parents to guide their toddlers in this precious growing age.
Most importantly, you don’t have to be The Wolf of Wall Street” to teach your children about basic finance. All you have to do is build a strong foundation for your child by giving a perspective to their vision and building habits.
There are many ways to make your kid finance literate. You can do it by incorporating both knowledge and skills in one scoop. As a parent, it is your responsibility to build a strong financial capacity in your children. Yet, kids must take lessons from trials and errors also. Financial literacy is consistent and intent on managing finances.
How Book Reading Can Be Helpful?
For adults or teenagers, reading books is the best way to improve your fiscal literacy. Regarding accumulating wealth and setting financial targets, seeking help from a financial analyst is an excellent option.
Achieve Money Management Lesson For Kids
This article describes two ways through which you can achieve this central goal:
1. Practical Activities
Below are some practical activities that you should follow to give money management lessons to kids
i. Set Goals For Kids:
a. First and most important is to discuss the difference between wants and needs with your children.
b. Tell them that they need to save for buying that expensive plaything. Tell them about how you save money for certain things you desire to buy.
c. Ask your children to set these desires aside in terms of saving goals.
d. Parental behavior is the most significant source of learning for them. Kids observe parents closely, and hence your actions will become lessons for them.
e. Explain them with your examples like how you save to purchase some XYZ thing.
ii. The Real Scenario:
a. You need to tell your children the facts and make your kids aware of what the real world is and how money works.
b. Take your children to the market and discuss various businesses.
c. Tell them about wage rates and how salaries are linked to different occupations. Make them realize the real value of money.
d. Give the gift of mutual funds to your kid, the plans which are specifically made for kids. By doing them practically, they will learn more actively, and so retention will be more.
e. For tiny kids, start teaching them the different kinds of denominations in money and play games related to it. So that learning can become fun.
iii. Shopping For Groceries Or In Malls:
a. Take your kids along with you while going for grocery shopping or shopping in the mall.
b. Tell them about the different rates of different products. You can do activities with them like which company’s product is cheaper, what is the amount for different packaging?
c. Primary school children can understand the basics of comparative shopping.
d. Please pay attention to children while giving them the task of making shopping lists. Observe the sales circulars of their stuff so that you can guide your child regarding the art of reducing the expenses and can discover the value of money.
e. While grocery shopping, show your kid about comparing different brands of an item. You must teach them to reduce the cost and enhance their decision-making capabilities.
f. When a kid wants to buy something of his desire, let them purchase it with their allowance or money saved. Make them practice to evaluate the product prices with online sales maps. Teach them to check store websites for prices to get the most out of their money. This lesson will always be handy for them.
iv. Open A Bank Account:
a. Open the bank account for your kids.
b. Most of the banks offer zero balance accounts schemes for children.
c. Tell them to deposit their savings in the bank.
d. In the same manner, send your kid for investment-related things also. They will get to learn a lot more from this experience.
e. Make them fill their school fees by themselves and other such kinds of stuff. This will create a habit in their life.
f. As children grow up, and ages between 9 to 12, they can learn about savings accounts and why they are essential.
g. Children in this age group may earmark a part of their allowance to put into a bank account. Tell them about the benefits of interest-allowances offered by banks. Let them learn to have the habit of saving money later.
h. High school students must learn to use technical currency like a debit card to enhance money management skills.
v. Teach Them About Credit Cards:
a. When your middle-age children want to purchase something which is expensive, tell them that they can bank up all amounts or have a loan of the money from you – with interest.
b. If they fail to reimburse you back on time, show them the related penalty by adding up their cost. This practical activity will solely help in gaining tremendous experience at their age.
c. Build ways of teaching your toddlers according to their age about credit cards, their management, loans, and penalties.
vi. Be The Bank For Your Kids:
a. Introducing your child to the concept of money can help them make more money. Give them an incentive to take only 90% of their allowance to earn only 10% extra the following week.
b. Practically doing so will teach them the quality of patience. It will also teach them how to plan spending and income and put money to best use.
c. With little Kiddos, physical currency play is an innovative and more effective way to make them learn about currencies.
d. To make them learn about money management and handling, you should teach them some smart ways. Teach them to store money, starting from piggy banks in the initial stage to paper envelops and bank accounts.
a. Try to include various fun activities to make your kids learning more interactive and fruitful.
b. Board games such as Monopoly, Game of Life, Business, Payday, and Stock Exchange offer a variety of suggestions on money management, financial planning, negotiation, and career planning.
c. These activities also inculcate the quality of plotting strategies in your kid.
vi. Give Allowance:
a. Give your kids some money allowance on a monthly or yearly basis. Let them do their little expenses by themselves.
b. Inculcate the habit of making a budget and account for that and plan it accordingly. To buy expensive toys, let your kid save money to buy that.
c. Always take a review of the account they make to keep on a check of their activities. And tell them the scope of improvements and mistakes and how more efficiently they can make accounts.
d. Whether to tie allowances with work can also be the nice tact to inculcate in your kid with the habit of doing works.
e. One interesting way to make their learning interactive and fun is to give children a flat allowance in exchange for the basics of their choice. Also, give them a chance to earn more from larger tasks also.
vii. Importance Of Giving:
a. As much as earning is necessary, giving your money to charity and less fortunate ones also hold equal importance.
b. Explain to your kid about the charity thing and why this is important, by giving your own examples.
c. Observe your kid closely as to whom he has a soft corner and show him ways to provide aids to the unfortunate.
d. Children should understand the importance of giving their time; in fact, to your family is an important aspect of life.
2. Through Financial Aiming Books
The analysis of this factor is categorized according to the classes in which your kids are. So, the books can be of great help to your kids.
i. From Class 2 To Class 5:
School is a wonderful time to teach children the value of earning and saving money. Start using money itself as a means for teaching. When kids first learn to count, allow toddlers to do work outside—whether it is guarding somewhere or just working as a waiter.
This is the best way to inculcate healthy marketing habits, earning, saving, and otherworldly aspects.
a. Paddy’s Payday:
- Paddy was an Irish terrier who performed for a living.
- He had found a long list of ways to spend his money.
- The books give the message to spend, and this is not appreciable.
- However, you can change this by opening a discussion with your kid about which of the paddy needed, and he spent on what.
b. Uncle Jed’s Barbershop:
- Students should hear Uncle Jed’s story. Stories about the different phases of how he saved money by working hard to purchase his own barbershop, despite encountering significant failures in his journey.
c. Warren Buffet’s Secret Millionaires Club:
- The animated series features Warren Buffett as the mentor of a group of enterprising children. Who exploits lead to financial and business problems.
- This series teaches your kids the basics of good fiscal decision-making skills.
d. Those Shoes:
- The boy needs a new branded shoes. His grandmother can’t afford it. And The story goes on.
- This helps the children to learn not to run after the branded things.
e. Financial Sources Specifically Designed For Kids:
- An Introduction To Saving And Spending: This course will help students realize the importance of money-saving. They will also be able to learn the benefits of investing, additionally creating an easy savings plan.
- Finding A Fabulous Financial Plan: This lesson plan, designed for grade-2, introduces a variety of “fancy” words. It includes the descriptive economic vocabulary inherent within the lesson. It is useful in both social studies as well as real-world mathematics and financial literacy.
ii. Class 6-8:
Our pre-teens and teens are starting working or doing extra work at home and around. So that kids can earn lawn sowing, lawn cleaning, help with the family business. Or even Can also start his mini-business.
These are all tremendous ways to create the value of hard work and the significance of saving money. It is okay to permit some financial errors at these initials. This is the best instant for children to learn from these activities.
a. Lawn Boy:
- This book gives entrepreneurs and business lessons to your kids.
- Yet, it would help if you guided your child about a penny stock and investing their money with random people.
- The imagining story of a lawn boy making a small fortune with his neighbor turned business manager to invest his money in the stock market.
- But the real scenario is far more different than that.
b. Lunch Money:
- This book focuses on entrepreneurship and starting small biz – and it is the same for children and adults.
- Most things are addressed on trademark issues, manufacturing, marketing, etc.
- Yet, the book does not enter some more complex topics like the tax on earnings.
c. What Can I Afford:
- In this course, children will get an opportunity to know about the prices of various cell phone plans that appear in the “show.”
- This course enables students to know about various banking accounts if the money saved from cell phones is kept in separate accounts, with the highest returns.
d. Practical Money Skills:
- Visa’s award-winning Practical Money Skills Program seeks to connect consumers, banks, and governments with tools and resources that help individuals of all ages develop their wealth management skills through its global financial literacy initiative.
iii. Class 9-10:
a. The Toothpaste Millionaire:
- Here it deals with manufacturing businesses on how a product is made, cost production, the overall price, etc.
- It gives a lesson to your child, and you can give live examples to teach them a lesson.
b. Seventeen Against The Dealer:
- This book teaches about business management.
c. Finance In The Classroom:
- Personal finance materials for grade -12 educators and students to help prepare our youth to be money smart.
d. Teach Banzai:
- Banzai is the portal providing educators, mentors, and students with online applications. It inspires them to learn more about real-life budget scenarios and other aspects like taxes, banking, etc.
- You can try all these methods to give your children a proper money management lesson.
Frequently Asked Questions
1. How do I teach money management to my 6-year-old kid?
I remember when I was 6 years old, my speech wasn’t clear even. Money management however is a pivotal thing every kid should learn nowadays. As I’ve mentioned above, make him know more about adjustments, how to save money, etc.
By this, he’ll be able to attain money management skills as he grows up.
2. At what age should I give my child a smartphone?
Smartphone means lots of applications, social media, and further leading to distraction. Although these days kids are roaming with a smartphone of his size, this is not correct. Smartphones can hamper the eyesight of your child from a tender age, apart from distracting his studies. So, make sure you give your child a smartphone after the completion of his boards at least.
Apart from that, for tuitions, he can carry a small pocket phone for making emergency calls, if any. Otherwise, phones are way hazardous to deal with especially at such a tender age.
3. My child is 14 years old. Should I check his messages without his knowledge?
Every individual has his or her own privacy. You need to build a strong connection with your child that he/she must share anything going on with her life on her own. Keeping an eye, checking messages, etc. can break trust. Trust once broken can never be re-built.
There’s a proverb, “Children are like wet cement. Whatever falls on them, makes an impression”. Teach your child every attribute, including money management skills. This will make him a truly successful person.