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How Do You Build Financial Awareness in Children

Posted by Sharannya Mukherji on

We all want to provide for our children, sometimes even when it means living beyond our means. Call it peer pressure or wants, children want us to buy everything from them – from phones to iPads to latest video game. As parents, we do try to discipline them about money, but give up quite soon when faced with relentless demands and emotional blackmail. While taking care of children and nurturing them is most important aspect of parenting, it is also necessary to teach them about the importance of managing money. Kids who are immediately given what they ask for, would not understand the meaning of ‘living within the means’.

How do you do teach your kid/s about money?

Talk regularly about Money in front of Kids

There is no age to when you can start talking about money in front of the children but do take care to keep in mind the age appropriate information you are sharing with your kid/s. For younger kids, show them the currency. Take them to the grocery shop and read price labels with them. When you give the money to shopkeeper, and buy stuff, kids try to make sense of the transaction that has happened. Older kids can be told about stock markets, investment measures, etc. Talk regularly about the school fees, how much each toy or gadget costs, talk about how you need to save for a secure future for the whole family, etc. Talk about money with ease and frankness, but do not talk about disturbing financial subjects that may worry your kid. Talk about have and have-nots, and whenever he/she asks for a new toy or gadget, tell them to giveaway a toy as well. This will instil a sense of charity as well in your kid.

Make them earn it

Tell them how hard you have to work to earn, and ask them to earn their allowance as well. While elder kids can be asked to do odd jobs (in the house or in the neighbourhood) to earn their allowance, younger kids can earn it by doing chores around the house. Make a chart ofhow much each chore would earn them, and pay them accordingly. You can also take awaythe money from them if they do not complete your chores, or any other work assigned to them, or when they do not behave. Ask the child to keep counting their allowance, so that they strive to earn more by doing good.

 

Introduce the concept of piggy bank

Even if your kid is older, ask them to save some part from their allowance. If a kid is old enough to have a bank account, open an account for them in a bank. Ask them to manage their money intelligently, and show them how. The younger  kids can put all the money they earn as rewards or get from relatives in this piggy bank. Open it once in a while, and count it with them. Write it where you kid can access it. You can also tell them that if they reach a certain ‘saving target’, you will double the money in their piggy bank or saving bank account.

Spend from their piggy bank

Just like saving the money, introduce your kid/s to the concept of budgeting. Tell your child how much s/he should spend from their piggy bank or account in a given month. Next time your kid asks you to buy something for them, ask them if it is a need or a want. As a parent, the onus is on you to agree/disagree to their ‘need’ or ‘want’. If you do agree, ask them to check their own piggy bank/account. Lend them money if they need more, and you agree. But do not say yes to all their demands even if they have the required amount. Ask them to track their spending as well.

Games

Another way to introduce kids to money is through games like Monopoly, Time and Money, Cashflow for Kids, etc. Not only will they learn a lot, it will also help you to bond with your child. You can give certain coins to your younger child, and ask them to trace it. You can talk about various denominations of these coins and also talk about what all appears on the coin apart from the numbers. Other games such as make believe shop, or an ATM, will also allowchildren to enjoy leaning about money.As a parent, it is important that you teach your kids the value of money. However, if your kid makes a mistake regarding money, do not reprimand them. Keep room for mistakes, and let them learn from these errors.



Children Finances Lessons Money Pocket Money Savings Tips

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