How to Raise Financially Responsible Children
Thinking about a new way to teach children about money management and How to raise financially responsible children? Here is the answer!
Tips and ideas to raise financially responsible children.
No doubts, parents should have discipline about money, certainly their kids follow! Experts says “Kids are great imitators” so the best and most effective way to teach child is, be a role model!
Another saying, “action speaks louder than words“. Act yourself for child to follow.
You can find a beautiful collection of resources at the end of this article, a gift to every child, and a best source for parents to bring their child financially responsible.
This article focused to children between 3 to 12 years of age, the best time to teach them about money.
Start talking about money
Ideal from age 3, start teaching about wise money management by counting coins. Let the child starts learn about money by holding coins, counting coins and recognizing the differences between each one.
Gift a beautiful piggy bank! Give them coins regularly to deposit in that piggy. Later, they can have a great time counting coins and dropping each one in their very own piggy bank.
Teach how money is used
Discuss with the kid about the expenses you have and them the bills. This is the best time to explain to child why you can’t always buy the toys he/she wanted.
Give opportunities to earn!
Kids love to have little jingle in their pocket. That’s the purpose of allowances. Allowances can be tied to chores or as some parents prefer, allowances are considered to be a base salary.
Whatever allowance system you subscribes to, it’s a good idea to include opportunities to earn additional money as well. For example, a surprise bonus rewarding for a good attitude, a job well done or special efforts being made, is a powerful motivator.
Teach about income and expense
When you choose to give pocket money as a reward, remember that the rules must be understood by everyone involved. Kids must understand how much you give and for what.
If your child can read, make a list of the chores with their matching reward amount. If your child is younger, draw pictures or cut them from a magazine and draw circles to represent the coins they will get for each task.
Having an understanding will prevent bargaining and allow both parents to handle the situation in the same way.
Teach the art of spending
Deciding how much and how to spend the money and on what is definitely an art worth practicing.
Teach the good practices of convince themselves that buying something they don’t need on sale is saving.
The art of spending is defining what you need, recognizing the pleasure of buying something very special and then looking for the exact item that fits the bill.
Teach from borrowing
The first time your young kids ask you for a loan, be happy, because now you can teach them about savings!
Only when kids want something beyond their financial means you can explain why saving money is a good idea. Teach them to always put 10% of their money aside.
At a young age, they will not understand what 10% is but tell them it is a tiny piggy bank in the piggy bank of money you keep there for emergency. This is the money you keep for something big or special that you want later.
Tell them to put 1 out of every 10 coins in the tiny piggy bank. Saving is a good lesson in waiting, something that is hard for young kids, because their perception of time is not fully formed.
As the child’s earnings grow, they will learn not only math skills, but life skills as well. They will learn the value of money; that money is earned through hard work and daily effort.
Some parents may opt to exchange the play money earned for actual money later down the road.
For our children, they often asked us to buy something each time we went to the store. The “job duty” project has minimized their requests because the responsibility now falls upon their shoulders. The money they earn is used to purchase something they want.
On some occasions, our children will get to the store only to see something different than what we went to the store to purchase. Usually this new found item costs more money than what has been saved.
At this point, our children need to decide if they will buy what they planned or if they will return home empty handed so they can save more money to purchase the more expensive item. What a great life lesson to be learned!
This is all about How to raise financially responsible children.
Must have resources with parents for their child
Few best resources carefully selected by considering its high positive impact to the subject, widely used by parents across the glob to teach their child about money and money management. These are the must have’s in the preschoolers library!
1. A Bargain for Frances by Russell Hoban – A class story work and one of the excellent additions to a preschoolers library! Best for kids aged 6+. A good read for setting goals!
2. A chair for My Mother by Vera B Williams – This classic and award-winning picture book best to teach kids about setting goals and earning.
3. But I’ve Used All My Pocket Change by Lauren Child. This is a best guide to teach about making decisions and wise spending
4. Just Shopping with Mom by Mercer Mayer – This would teach kids about prioritizing things and wise spending
5. Those Shoes by Maribeth Boelts- A beautiful book for kids to teach about prioritizing, sharing and borrowing
6. The Purse by Kathy Caple – A little book to teach kids about Setting Goals and Solving Problems