Educating your child about the importance of saving their money is one of the lessons parents should teach their children at a young age. It can make the child analyze the difference between need and want. Some very simple yet effective practices can be used to teach them about financial management. Here are some tips you can use to help your child on money management:
The primary requisite is to discuss money with them. Children might have a vague idea about money, but it is the parent’s duty to make them understand it’s value. Small concepts like earning and spending money, saving it, paying for goods can be discussed in the form of interactive activities.
Encourage to Invest
Kids usually save the money they get in piggy banks. This inculcates a habit of investment in children. When the amount gets bigger, parents can bring in the idea of a savings account for the kids in the form of bigger piggy banks.
Need and Want
It is important to make kids understand the difference between need and want. This can reduce unreasonable demands from kids. Being able to distinguish between the two things can help the children in setting priorities financially.
Teaching budgeting could help kids know about managing their money. Parents can encourage children to maintain an account book of their pocket money, which will empower them to manage the money they get.
Give Monetary Rewards
Kids should be given tasks and chores. For completion of every task, monetary rewards could be provided, thus explaining the concept of earning to them.
Introduce Goal Setting
Kids make demands ten times a day, some of which can be reasonable while others might not be. Motivating children to be able to buy the things they demand from their own savings can be an excellent money management lesson.
Encouraging the child to accompany you when you go grocery shopping, could help them understand about transactions, budgeting and even bargaining. They can start analyzing which products provide them value for money.
Having your kids involved in charity from childhood makes them humble about their money. They understand the luxury that money adds to their life and how they can make the best use of this luxury.
Open savings bank account
Opening minor savings accounts could be the first step for children to feel accountable for their savings. It can also be a stepping stone to understand banking transactions.
Engage in Household bills
Have your child assist you in taking up administrative responsibility of household bills. Teach them about the importance of keeping records of these bills while you spend quality time with them.
Now that you have this list, take the first steps to make your kid money wise today!
This Content has originally written by Yes Bank Team. No Copyright/IPR breach is intended.