How to Teach Your Kids About Money Matters

 

     Being money-smart is an invaluable skill parents can teach their children because from the time a child begins to make decisions for herself, she will be deciding how to spend her money for the rest of her life. Money matters stay with you for ever! When I was a kid, my parents encouraged us to save part of the money we got from them or received as gifts from other people but that was all to it. We didn't go beyond saving and later handing it over to them for safe keeping or to buy an item for us. The saving habit stuck since then and I also picked up financial tips from reading books, observation and from other people. Learning more about the way money works has helped me to be intentional about my spending and get the best value from my income. Some of my friends have asked me often about my 'money secrets' and until now I didn't think there was anything to it because it had become deeply ingrained in me. So here I am sharing my secret with you so we can raise kids who are money savvy. I have also made a commitment to myself to teach my kids to be economically independent and empower them to make their decisions about money.

Why teach kids about money?

     When you teach your kids about money, you equip them with an important life skill. Like I said earlier, you will be making decisions about money for as long as you live so why not start early so that before their spending habit is set, they would have been taught to do it right? We also need money to pay for the things that make life comfortable like food, shelter, clothes and education. If you start early, they will have many years of practice before their choices affect their future. There is also the recent craze about making money through fraudulent means. If you catch them early, they will avoid this pitfall.

When do you start teaching kids about money?

     As soon as they can count. As parents, we are in a position to shape our children's relationship with money. Besides, the knowledge children imbibe early stays with them a long time. Many young adults these days also don't know a lot about money and can make mistakes that lead to financial difficulty.

How to teach kids money management

• Our kids need to know that the money they have, has been entrusted to them by God and they must prove themselves to be worthy stewards: Matthew 25:16-18, 'Then he that had received the five talents went and traded with the same, and made them other five talents. And likewise he that had received two, he also gained other two. But he that had received one went and digged in the earth, and hid his lord's money.'
• You are their first teacher. Kids learn from the way you talk or do not talk about money, how you react to money issues and how you spend too and they will mirror it so set them up to succeed with money. You can share your ideas with them in everyday life circumstances by involving them in the home finances.
• Learn how to earn an income: Our kids need to know that money is a reward for work done not something to always be demanded for. When they get this right, it will shape the way they spend and also keep them out of the trap of get-rich-quick schemes.
• Budgeting will help them make decisions about money on their own and also be able to differentiate between needs and wants.
• Control their spending impulses. Children will also get to know that when money is gone, it is gone and you will have to start saving again. They will also learn to prioritise their projects and also learn contentment.

Practical ways to instil the value of money in children

• Teach your kids to use money jars, at least three of them. Label them as 'savings,' 'spending,' and 'gift.' The first jar can be for an item that requires a lot of money, the second jar for little expenses like a chocolate bar and the third to give to other people in need. Tithing should also be taught.
• Involve them in the family's finances by showing them how to prioritise needs and allocating the money available. 
• If a child spends all his money on a whim and comes back for more, seize that opportunity to teach.
• Apart from daily chores assigned to a child, they can be given an extra task to carry out and earn some money. This will teach them the value of work. Money paid should not be too much so they can learn to save up. Children learn independence and responsibility through chores. You can also place them on an allowance.
• Help them select toys or games they want and save up for it. When they realise how helpful saving is, they will be sold on it. They will also learn goal setting from this activity.
• Talk about money often and make it easy for kids to come to you each time they need clarification.

     These ideas are not as difficult as you thought they would be, right? As they grow, they can learn to save with the bank and invest their money. Thank you for reading, please share this post and follow us on Pinterest and Facebook. Thank you.