Teach Your Kids Money Management Skills

Whether your child dreams of becoming a professional accountant someday or not, it is important to help your young one understand some basics in finance so they can avoid future problems like so many students facing student loan bankruptcy(source). This will not only help him determine the concept of saving and spending, but it will also help him understand the importance of managing finances and committing to a financially fit future. Of course, while you would want your child to enjoy his moment “as a kid” first, you would also want to introduce him in the world of money as early as possible. When he reaches the proper age, he will be ready for budgeting and managing his own finances, and maybe, he will be even able to help you do your own books! The following tips are a great place to start.

kids with money

Tip #1: Make the learning fun

As you know, kids are kids. Sometimes, it’s really hard for them to teach something because all they want to do is play. But don’t worry, as you can use that as an advantage to teach them money management skills. Since kids love games, you can use game activities and even jokes to teach your kids about finances. Visit different toy shops to find toys and game activities that have something to do with money; for instance, set up a ‘pretend toy shop’ where your child can purchase something that he wants. You can use play money so he can buy things. Or if you want, and also to make the learning process much more exciting, allow your child to be the owner of the ‘pretend toy shop’ so he can have an early experience on how to run his own business. Kids learn faster when they are having fun.

Tip #2: Look for teaching opportunities

As mentioned, it’s never easy to teach kids about money. So one of the best tricks here is to look for opportunities where you can show to them how to handle money-related issues; for instance, when it comes to bills. Whether you’re paying your bills or buying something, discuss to them what you are doing. This will give them an early idea how some things, especially things that are related to money, work. If you invest in something, make sure that your kids also see you do it, and then explain how that works. It’s also a good thing to show your kids some relevant parts of your monthly statements, such as the total amount of your groceries, the charges for movie tickets, the cost of your electricity, etc. And when it comes a moment that you feel like going out and decide not to because you know you’re short of money, let your kids know that so they can have an early understanding of the phrase “just because you can doesn’t mean you should.”

Tip #3: Allow them to make mistakes

Mistakes are OK. In fact, mistakes are good. Everyone is making mistakes. Even the smartest people in the world make mistake; even the most successful people in the world make mistake; even you make mistake. It’s one of the greatest tools for learning. So don’t get mad if your child makes a bad spending decision or forgets to record his budget. That’s fine. After all, he’s just a child. Just help him learn from those mistakes by explaining to your kid the consequences of such actions. Next time, your child will make better choices. Just be patient.

If you want to learn more details on how to properly manage your finances and give your kids more money management skills, visit www.bookkeeperco.com.au.

Leave a Reply