It’s never too early to start teaching your kids about money, even when they’re tiny. The financial lessons they learn as children will serve as the foundation for the habits they develop as they get older. We’ll demonstrate how to give your children the financial head start they deserve and prepare them to succeed financially at any age. When your child is very young, you can include financial concepts in their pretend play by having them act out scenarios like playing a pretend restaurant or store.
It’s easy to teach children about money by utilizing everyday activities as learning opportunities. Continue reading for enjoyable, easy ways to teach your child about money.
Yes, it is never too early to begin introducing the basic concepts of money. You can start by teaching your toddler to identify various coins. Ask them to distinguish between a rupee coin and one worth five or ten rupees based on size and value. Through this simple lesson on coins, they can practice the fundamental skill of differentiating money based on its value. Show them how to exchange these coins for goods at a grocery store to help them further understand how money works. And with that, you’ve successfully taught your toddler the fundamentals of economics.
At this tender age, your child begins to pretend play. They now mimic their surroundings at playtime. You may see your child be a school teacher one day and a doctor the next. They are watching and learning. This is an apt age to get them to understand the value of money. Take them to a shop, give them a Rs. 10 note and tell them to go ahead and look for something they like within that price range. Help them to read the basic MRPs on products. They are introduced to the idea of purchasing power through this fundamental activity. Your child will now be able to tell the difference between denominations of coins and notes and know the value of what they can buy.
This is an excellent opportunity to take your kid with you to the bank or an ATM so they can see firsthand where you get your money. Even though the concept of bank accounts and how they work might be challenging for them to understand, you could explain how you work to ensure there is money in the bank.
Your child will now learn the basic mathematical concepts of addition, subtraction, division, and multiplication. The best time to permit them to go on grocery runs and exchange items for money is now. Here, they will start to comprehend the worth of the goods and how money is used to buy things at their true worth. Receiving change or dispensing exact change from their wallet will aid in their understanding of product value and worth.
Here, the concept of saving can be introduced gradually. Giving them a piggy bank or, even better, opening a bank account in their name can help them comprehend this better. Let them decide how to spend their money. (Note: Do keep a tab on the upper limit you are willing to let them splurge.) Children tend to invest their money in toys and games at this age. Allow them to do it, but at the same time, emphasize to them the importance of maintaining the toy and the cost they paid for it.
Teach them to compare spending on quality if their investment was in a subpar product. A comparison of other similar investments in toys may be a good idea. Now is an excellent time to explain how their spending has reduced their total savings. Here you can introduce the idea of work-for-pay by having them complete basic household chores in exchange for money.
Your teenagers will undoubtedly be conscious of their appearance and of who they are at this age. Children enter an “I want” stage as a result of growing peer pressure. Most kids now demand branded goods like apparel, accessories, gadgets, and more. It is a natural phase, and all kids go through it. This can help you determine whether or not your advice on “saving” has been understood. Here you introduce the idea of limitations and emphasize what is essential. Allow them to calculate a product’s value and how long it took them to save the money before letting them decide what to buy with their savings. These straightforward financial trade-offs teach them how to value their savings and the products they buy.
This is an excellent time to introduce them to monthly household budgeting. Let them assist you in planning the budget for the groceries and determining what essentials are needed while shopping. Make them aware of the recurring monthly bills for necessities like gasoline, water, electricity, school or tuition fees, etc. Help them comprehend how you allocate your income between savings and expenses before spending on extras that do not qualify as necessities.
In the next stage, you will be dealing with an adult. Their understanding of earning, saving, and investing will be aided by the foundation you laid while they were younger. As parents, we frequently undervalue our children’s intelligence and capacity for understanding. We tend to be overly protective and keep our financial woes and other struggles from them. While you do not need to burden them with your woes, you can still be open with them about your limitations. If we are more open and honest with children about the issues that exist in the real world, they will be better able to handle them in the future.
Have you started teaching your child about money yet?