If you don’t show your children how to manage cash, another person will. And that’s why you need to teach your kids how to handle finances when they are young. There are many ways to give your children the head start you wish you had and set them up to win with money at any age. The money lessons will be different for different age groups. However, before going into that, there are two principles you could teach your kids whatever be their age. They are:
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Explainingyour income source
At the point when you are showing your children cash, it’s critical to tell them about where it originates from. Cash doesn’t simply originate from the mother and father’s wallet. You need to tell them that when you work, you get paid, and at any point when you don’t, you don’t get paid. The key is to keep emphasizing and demystifying the connection between work and cash.
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Lecturingon the three standards: giving, sparing and spending
Youneed to teach your children the three fundamental standards with regards tocash — giving, sparing, and spending. Giving is one of the most significant ofthe three classes since you’re instructing them to feel the effect of helpingother people at a young age. That is significant.
Aboutsparing/saving and spending, urge your kid to put aside a portion of their cashto their reserve funds, and some to investing every rupee they get paid. Advisethem that once their cash is gone, it’s gone. If they want money, they willneed to earn it. These standards will teach them not to spend frivolously.
Now, how do you teach children of different age groups about money?
Also read: 6 Steps to Secure the Future of your Special Needs Children
MoneyLessons for kids below 7 years
Give them a clearjar to save
The secret stash is a good thought; however, itdoesn’t give kids a visual. At the point when you utilize a see-throughcontainer, they see the cash building. For instance, recently, they had a fiverupee note and a few one-rupee coins. Today, they have a five rupee note, two five-rupeecoins, and a two-rupee coin. Talk through this with them and overemphasize thattheir money is compounding.
Be a model
An investigation by the University of Cambridgefound that money management in youngsters are shaped when they are 7 years ofa*ge. Little eyes are watching you. In case you are swiping your credit cardeach time you go out to the mall or the market, they will in the long runnotice. Or on the other hand,if you and your life partner are talking about savingcash, they will notice that as well. Be a solid model for them and they’ll besubstantially more liable to follow it when they get more seasoned.
Tell them thateverything comes at a cost
You must do something more than just stating, “That car costs Rs. 500, dear.” Help them snatch a couple of rupees out of their container, take it with them to the store, and genuinely hand the cash to the clerk. This straightforward activity will have more effect than a five-minute talk.
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Money Lessons for a pre-teens
Teach them about opportunity cost
As you might know, opportunity costsrepresentthe benefits an individual might miss out on when choosing one alternative overanother. Teach this to your kids. That’s just another way of saying, “If youbuy this toy, then you won’t have the money to buy that Spiderman T-shirt.” Atthis age, your kids should be able to weigh decisions and understand thepossible outcomes.
Give salary, not allowances
Don’t just give your kids money for living with you.Pay them salary based on chores they do around the house such as taking out thetrash, cleaning their room, or helping you wash dishes. They will thenunderstand thatmoney isearned—it’s not just given to them.
Note that when you allow your children to handle money,they will commit errors.However, they should commit those errors under the security of your rooftop.
Also read: Money Lessons From Robert Kiyosaki The Author of ‘Rich Dad Poor Dad’
Avoid impulse buys
“Dad, I just found this Avenger video game. It’sperfect and I love it! Can we buy it please?” Does this sound familiar? Thisage group knows how to make impulse buys—especially when they are using someoneelse’s money.
Rather than yielding to such impulse buys, let youryoungster realize they can utilize their well-deserved bonus to pay for it. Bethat as it may, urge your youngster to hold up in any event daily before theybuy anything over $15. It will probably still be there tomorrow, and they’llhave the option to bring in that cash choice with a level head the followingday.
Stress the significance of giving
When they begin saving money, be certain you show them what is giving toothers. They can pick a religious cause, a charity, or even somebody they knowwho needs a little assistance. In the end, they’ll perceive how giving doesn’tsimply influence the individuals they provide for, it makes them feel good too.
Money Lessons for Teenagers
Teach them to be content
Your high schooler presumably spends a decent part of their time gazingat a screen as they live aninternet-based life. Furthermore, since they’re onthe web, they’re seeing the life of their companions, family, and even completeoutsiders! It’s the speediest method to welcome the comparison trap. You mayhear things like:
“Father, Rahul’s folks got him an SUV! Why I need to drive this compactcar?”
“Mother, this young girl at school got the chance to celebrate herbirthday at The Oberoi. I need to do that as well!”
Happiness begins in the heart. Tell your teenager how to be content with what they have.
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Give them a bank account
When your child is young, you ought to have the option to set them upwith a straightforward bank account. This takes money management to a higherlevel, and will (ideally) set them up for dealing with a lot more money whenthey get older.
Instructing your youngsters about cash at any stageis going to require some serious energy on your part. It won’t generally besimple. In any case, if you need your kids to realize how they can effectively handlemoney, taking the time out now will be surely justified, despite all thetrouble it may cause.
