7 Ways to Raise Money-Smart Kids
We read fairy tales to kids, put them to sleep narrating stories that emphasize the world is a good place and life is easy while knowing in the back of our head that it’s not.
Life is extremely difficult, and children should not come to terms with this fact only when they’re older. One of the most important things that’ll help them survive in the world is finances. As parents, you might provide them everything, be there as financial and emotional support, but things won’t stay the same ever.
One day your kids would grow and have to survive financially by managing their own money. It won’t be easy if they’re not money-smart.
Ergo, your lesson here is that you have to raise them to be money smart, and not depend on time to do it for you. Here are some of the tips that can help you do that.
7 ways to raise money-smart kids
1. Talk about money
If you think talking about money with children is pointless because they’re too young, or “They won’t get it,”
Talking about money is essential; don’t wait for them to turn 16 to do that. The sooner they learn about money, the smarter they’ll become as time goes by.
Additionally, by talking about money, I don’t mean lengthy lectures, but practical knowledge about it. Let them know when it’s the best time to buy something, how to save during the holiday season, how banks and ATMs work, things like that.
2. Do money-learning activities
Theoretical knowledge works, but when it comes to activities, nothing can beat them. Why? Because when you put theories to use, you remember your lessons well and for a long time.
Thus, indulge them in activities. Take them to banks, let them buy groceries on a budget, If your kid is too young for that, accompany them to shops, give them the money, and ask them to do the payments and collect change.
3. Be a role model
You can teach them all the good values, but what they will pick up is the things YOU do. Why? Because
For instance, if you want them to save, don’t go by spending lavishly without a thought in front of them. Be mindful. Save.
Additionally, while you are at it, focus on positive parenting. Don’t taunt them all the time about money, or the heavy expenses you have to incur on them – Be positive, your goal is to make them money smart not making them resent you.
4. Let them manage their own money
You cannot wait for them to turn 18 and learn to manage their money on their own at ease. In fact, it’s better if they start early – even when they are 10 years old.
Having said that, giving them allowances, pocket money would work if you have teen kids. Let them manage everything in the same amount. You might think it’s cruel, but it’s not if they learn a lot from it.
As for younger kids, you can give them piggy banks to save and manage their own money.
5. Make sure there’s a line between being a money saver and a penny-pincher
It’s ideal if your kids learn to save. However, it’s not if they become a penny-pincher in the name of frugality.
So, your goal is to not let them become the latter. You wouldn’t want your kids to be financially dependent on someone, would you?
6. Make it fun
Lessons are remembered when they are fun. So if you are teaching your kids money-saving, make it fun. Make them watch movies that might help them understand the value of money, or play Monopoly.
Yes, you heard that right. Surprisingly a game of Monopoly can make them learn a lot about finances. For starters:
- It can make them learn about loans.
- It enlightens them about property and ownership.
- It teaches them money-related concepts such as interest and mortgage, income and property tax, etc.
7. Lastly, inculcate good money habits in them
At the end of the day, it’s all about adopting good money habits. Encourage your kids to do the same. By
- Monitoring expenses in a spreadsheet – every single penny.
- Preparing budgets.
- Calculating compound interests.
- Money-saving.
- Making investments, creating a portfolio.
- Maintaining a good credit score.
- Avoiding the use of credit cards.
You can help them develop these habits by involving them while you do the same, having healthy conversations about these topics, and lastly letting them have their takeaways by watching you follow these habits.
Well, this will do the job. Now that you have these tips, I hope you’d know what to do. All the best! Additionally, if you have a few more tips that can help other readers to raise money-smart children, feel free to share them in the comment section.
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