If you have kids, you may want to raise them in the best possible way. Your kids should know about all aspects of life, i.e. finances, relationships etc.
Out of all the aspects, the financial aspect is one of the significant aspects that we want our kids to excel in as it will help them make their lives smooth. Our kids learn whatever we imitate in front of them.
Once they know the importance of finances, they can easily manage their life. If you actually value your finances, make sure to pass it on to your children. Sometimes, parents feel that children will learn finances from school. But parents are the first school for children.
The financial introduction for kids
There is no specific age to learn about finances. There are activities available that will help you teach your kids about finances. You can introduce the financial concepts at any age and make them financially responsible.
Start with smaller tasks and make them aware of the basic financial concepts. It is always better to prepare them early than to start late. The kids can learn money management from you and can manage money in the form of their pocket money.
If you raise financially independent children, it has its own benefits. If your children are financially independent, they will get confidence once they start earning.
If you have huge bills to pay, you do not let your children know about it as you think it is not the right time. But start as early as possible as your children should be aware of the right financial management in their life.
Many parents borrow guaranteed loan approval no credit check direct lender. These loans are available easily. If you borrow these loans, make sure to pay them back on time. This way your children will also learn the same thing.
If you do not repay these loans, they will also be casual about it. They will learn it by default. For example, you may require emergency cash. You do not have anywhere to go. Borrow loans but on the condition of returning them on time.
Ways about money management
- Lead by example
If you believe in good parenting, you must know that you cannot pretend in front of your children. Whatever you do, your children follow. If you want your children to follow a particular habit, you have to imbibe that habit in yourself first so that your children can observe and follow the same.
You are influential for your children; hence you should lead by example. Teaching financial independence to your kids means limiting your spending and showing them the importance of saving money.
Whenever you go grocery shopping, always use voucher codes and discount coupons. This will help you save money and teach your kids the significance of saving. You can teach your kids that a penny saved today will be helpful tomorrow to spend.
- Saving, lending and spending
When you start educating your children about finances, start by introducing basic concepts, i.e. savings, investing, spending, lending/borrowing etc. You can make them learn by an activity.
For example, take 3 jars and label them saving, spending and investing. Give them pocket money and tell them their targets. This way, they can learn and know how much to save, how much to spend and how much to invest.
- Introduce children to the bank
You can get your kids’ accounts open in a bank and let them understand the whole procedure as banks allow a minor savings account.
Start it with a minimum balance and make them understand the banking process. This is an excellent way to teach them about banking functions and introduce the concept of bank savings.
- Teach them expense tracking
Once your children are aware of all the concepts, make them learn the importance of tracking their expenses. Tracking your expenses is an essential aspect of financial management.
If you do not track your expenses, you can never reduce your expenses. It is essential to be aware of your spending and know your exact financial condition.
- Value sharing
Teach your children the actual value of money. Do not just spend on whatever you need. Before spending, analyze your decision and see what the benefit of spending money on the required thing is?
You should teach your kids how to spend money responsibly, and you should also follow the same strategy. Although, these days, there are online loans for Christmas if you wish to borrow money to fulfil your expenses.
Sometimes, we are not having money during festivals and feel broke. In such times, you can borrow loans and spend your festival happily. But it is beneficial to stay away from the loan and make use of your resources effectively to keep happy.
Many parents do not borrow and spoil their festivals. You can always borrow these loans. The important thing is to return this amount on time. Have a clear intention before borrowing. This will give your children a clear message.
- Let them make mistakes
During the learning process, if your child is making mistakes, do not stop them from making mistakes but tell them where did they go wrong, and how can they rectify this mistake in future.
Also, teach them not to make the same mistake again in the future. They can learn practical, only when you give them some amount of money to handle on their own. You can start by giving them pocket money.
Once they learn to manage their pocket money, they have exposure to real-time handling money. This will make them smarter in terms of handling their finances. If they learn through their experience, they will never forget this.
This will give them a lifelong lesson that they can pass further. Make sure to help them whenever required but do not protect them all the time.
- Learn to compromise
Teach your child the importance of everything they buy from money. If they have to buy some things, they cannot buy them all; they have to compromise and prioritize their wants and buy them according to their priority.
There is no role of age in this concept. They cannot get it all together if they want chocolate, chips, and marshmallows together. Also, they have to weigh their decision whether it is worth buying and spending money.
- Set aside for uncertainties
After educating them about spending, teach them the importance of savings and let them know the importance of saving for uncertainties. It is very important in life to save for uncertainties as an emergency can happen at any time and with anybody.
In such situations, it is always better to have some money with you so that it does not give you stress and anxiety.
Conclusion
There is no guarantee that if you follow the above steps, your children will learn about money management in an effective way. You can invent and research more innovative and creative ways to make your child learn about money management.
Also, by being a good parent and leading by example, you can teach your child many things that they will not learn from anywhere else but from you.
