Money is an important component of human life. And its management is one of the major skills that people should scramble for. Ironically, it is a subject that not even schools take seriously in their curriculums. Even those that do, they do so with minimum zeal and commitment, some treating the subject as an co-curricular activity.
For that reason, homeschooling your kids about money management is the only option. Since it’s an unguided curriculum and without moderators, people come up with all sorts of dos and don’ts. That’s why we have delved into the subject to jumpstart the process on your kid. Below is an elaborate step-by-step guide on how to bestow this skill on your child. The guide is divided into different age groups from preschoolers to elementary and all the way to teenagers.
1. Pre-schoolers and Kindergarteners
This is one of the trickiest age groups to educate. It is an age where everything should be practical. So, what should you do?
Be an example
According to a study by Cambridge University, these angels learn best through observation. By the time they’re 7 years old, they personalize the things they observe from their parents. That’s why what you do with your money is very important. If you want to instill financial discipline to your kids, you need to be a good example.
If you are conscious with your finances, your kids will learn that by the time they hit your age. By being a good example, we mean beingwise and pragmatic in your spending lest you raise spendthrifts. Chances are that as the kids grow, they will replicate what you do with their own money.
Use a clear/glass saving container
By using a glass container to save, you give the kids a visual glimpse of the entire process. They see the money grow in the container from ten, fifteen dollars. As this happens, talk to them through the process. Explain to them the reason behind the increasing amount of dollars in the container. Tell them the importance of this process and its advantages. The next thing you will see is them forfeiting sweets and their luxuries to see this amount grow. For example, you can tell them instead of buy sweets, they can save up the money and buy something bigger and better like a toy.
Illustrate that things get paid for
You need to show the kids that all things come at a cost. Tell them how much their toys, clothes and trips cost. Walk with them to stores buying things and paying. You can also hand them the cash to pay and receive the balance. This helps provoke their thinking about the importance of saving rather than spending.
2. Elementary and middle schoolers
At this age, your kids are able to think and weigh options. You can reason with them and let them make decisions about simple matters. The following are the best ways to teach kids under this bracket money management.
Give money tokens
Whenever they achieve something outside their normal routines, give them allowances. You should however be careful not to look like you are paying them for their chores. These should only be for special accomplishments. This is meant to make the kids understand that money is earned and doesn’t just come from parents’ pockets.
Show opportunity cost
Explain to them various opportunities together with their pros and cons. For instance, explain to them the outcome of buying a video game rather than a book. Make them understand opportunities and prioritize the most important. Alongside this, avoid impulse buying. If you haven’t planned for something, do not let your kids bring you into it. Teach them about saving and planning for something on their own.
Giving
This should be a very important lesson immediately they start making a few coins. Teach them the importance of giving. You can help them identify their beneficiaries like children’s homes, churches and other noble causes. You should also ensure that you are leading by example.
3. Teenagers
Fortunately, at this age, the kids are mature enough to do most financial activities. They can shop, pay bills and even engage in family budget discussions. This is the time to test whether you are making progress or your kids need more drilling. Here are a few things to do to further engrave what you have been teaching about money management.
Assign them bank account responsibilities
This should give them a better perspective of more advanced banking options. If you have been teaching your kid all of the above, it’s time to move it to a higher notch. Open bank accounts under their names and let them manage their little money. Let them operate the account; save, transfer, and withdraw.
Let them save for a course
For example, you can tell them to save for their college, favorite venture or a trip. You can get them a summer job and then save a big chunk of that money in their college fund kit. This will give them a real taste of shouldering real responsivities. The result is that they will become more money-conscious.
Brainstorm with them on how to make money
Of course, teenagers have got plenty of free time and several wants. Instead of always asking for your money, you can help them think of ways to make their own money. You can get them a job during weekends, holidays, or even help them become entrepreneurs.
Teach them the dangers of loans and credit cards
Engage your teen on the demerits of credit cards and various forms of debts. Before proceeding to college, sit them down and show them the downsides vis-à-vis the merits. Give them other options instead of borrowing from anyone.
Conclusion
Giving your kids financial literacy isn’t a one-day endeavor. It won’t take days or a month, it takes years of dedication and hard work. But it will go a long way to giving them financial freedom. As you help them manage, get them to make their own money. This will make them understand how hard it is to make money, thus cultivating the art of saving and using it properly.