We as parents want to prepare our child for every situation. By the time our children are about to step into their teens, they are well versed with moral lessons, civic sense, and even first aid. So why are we not giving them the lesson which often sends shock waves destroying countless lives—that is, financial lessons.
It has been proven that early childhood lessons are better retained by children throughout their life. Teach your kid the importance of money and the ways and means to effectively utilize their resources. Here are a few ways to teach your child how to handle money wisely:
Start with an allowance: I am sure many of us were given fixed pocket money in our childhood. A fixed allowance for a month or a week (depending on your childʼs age) will help them know the value of money. They would be responsible for the expenses and the savings. Keep a fixed allowance based on their expenses, like commuting charges, snacks, movie time, etc. Also add a little amount for savings. Encourage them to save by giving reward like paying interest on the money saved.
Teach children how to save: For the first few times your baby might spend all the money and would ask for more money. Do not get angry; children by nature are pleasure seekers and not money savers. Teach them how to save money. You need to explain them that for bigger happiness in life you need to let go smaller pleasures. For example, for buying a geared bicycle you need to stop spending on snacks every day. Become their bank and give them interests and other freebies for every penny saved.
Part-time jobs: Give your child first-hand experience of earning money. Jobs will instill a feeling of pride and habit of saving in your children. Elder kids can take up summer jobs like teaching or working in restaurants or shopping malls. For younger kids you can ask them to do household work apart from the daily chores. This could include bathing the dog, cleaning the garage, helping in kitchen garden, etc.
Set an example: Remember those tiny eyes are always watching you. Set a good example for your kid. Every time you and your spouse have arguments regarding financial crunch, those eyes and ears never miss it. Every time you go on swiping those cards around the mall or restaurants, you child is noticing it. He/she might follow this behavior when they grow older.
Do not think that your child is too small for handling money. Do not wait for an appropriate time; rather start right away. Remember, “Don’t rescue your child from a challenge, rather teach them how to face it.”