Teaching Financial Values to Kids

There are many benefits to teaching financial value to kids early on. They will start to develop good saving habits, learn to make purchases after careful deliberation and start to understand why they cannot get everything that they want! In fact, these teachings will also help them in the long run, helping them to invest wisely and avoid getting into debt. By teaching financial values to kids, we are helping them plan for their financial security.

But who is to teach these values to kids? Obviously, adults around them, especially parents, are the children’s first teachers. Here are a few quick tips for parents on how they can teach financial values to their kids.

• Set an example – If you want to teach your children the value of money and you want them to learn it form you, you should set a good example to your kids. Do not misuse your credit cards and show your children how you need to save in order to be able to pay for all that has been bought on the credit card.
• Teach them the value of money – As your children grow older, encourage them to get a job. This is a great opportunity for them to learn about how hard work pays and the value of time. They will also learn to think twice before spending that hard-earned money. Some purchase that seemed perfectly reasonable when a parent was paying for it, may not seem so attractive after all.
• Get them to save – Children today are believed to spend nearly five times what their parents would have. Encourage them to start saving. Open a bank account for the smaller children and match whatever they manage to put aside every month. Older children may be interested in investing in mutual funds or stocks. Explain the basics of they work, of the risks they carry and then help them select a few to invest in.
• Teach them to manage expenses – If your child accompanies you while shopping, show them how you can bargain-hunt. Do not give your child a credit card till they have demonstrated that they are responsible enough for one. Similarly, if they have been given cell phones, agree to pay only for a certain amount of phone charges. All excessive phone charges are to be paid for by the children themselves.
• Teach them to make informed decisions – As your child grows older, you should involve your child in your decision making process. Explain to the children what their request would have cost and why it was not being considered. Let your children use the same reasoning to come to a decision before coming to you with a request. This will help them in making better decisions.

By teaching children to save their hard-earned money to enjoy another day, to be wise consumers and make better buying decisions, and to manage their expenses, you are teaching them very valuable skills that will stand them in good stead when they are adults.