When it comes to money, many parents refuse to teach their children about money and communicate openly about finances with them. This is where they make the first mistake, by delaying teaching about money you are doing them more harm than good.
Therefore, it is up to parents to slowly introduce them to the world of finance, savings, rational consumption, investment, and donating money.
Although money is necessary for our life, it is not the most important thing, but they must treat money with respect.
Searches for terms like, “how to teach kids to save”, “best kids debit card”, or similar terms are on the rise every day. This implies that more and more parents around the world are looking for a way to teach their children how to manage money in the best possible way.
We will highlight healthy ways in which you can lead them to positive and good decisions and choices through open communication about money.
Talk openly about money
Before you start teaching about finances, the first and most basic rule is to explain to them how money is obtained. Money is earned by hard work and it is not in abundance, so they must be careful with the rational disposal of it.
Explain to them that when they are in kindergarten or school, parents have to go to work to provide basic needs and things for their children.
Explain to them the difference between needs and wants
One of the most important and basic things is to explain to children the difference between needs and wants. Although parents would like to give everything to their children, there is a certain limit.
Parents also have to explain to children that there are bills, mortgages, car payments, loans, food and drinks, clothes and shoes, daycare, and many other expenses that they have to spend money on. Wishes are the last thing on the list of expenses that parents have, so children must be understanding when their parents can’t fulfill some of their wishes because sometimes they don’t have money.
Let them earn their own money
There are various options for how children can earn money, no matter how old they are. Parents can give extra money if the children do various household chores every day, or increase their pocket money in line with their efforts.
However, older children can find some kind of part-time work such as looking after pets, walking dogs, mowing the grass, shoveling snow, tutoring other children in math or physics, babysitting, and many other jobs.
Learning to double money by investing
One of the basic things to best prepare children for the future is to teach them to invest. Children can invest in well-known brands or companies such as Netflix or Google. However, we advise you not to stick exclusively to one type of industry but to invest in various types of industries to have a colorful portfolio and types of investments.
The importance of having a savings plan
Children must know that it is necessary to have a savings plan and to have some higher goal where to invest that money later. It would be best if you talk about what they would like to save money for, that way they will have more motivation to save money and develop their saving plan.
Give them a kids credit card
One of the innovations is this type of card, where children have almost the same opportunities as adults for saving, spending, investing, donating, and earning money.
However, there is an additional feature, namely task tables for all types of children’s ages, which children complete within the given time limits. All activity that children perform on the account is under the supervision of their parents.
It is very important to teach children to be socially aware and teach them to donate money to those who need help the most.
Children must know that not everyone is lucky enough to have a roof over their head, daily meals, and clothes and shoes. And that they must always help those in need and that they should not be selfish and arrogant.
It is very important to be patient with your children, to show them that money is not at all complicated and that a secondary thing is nevertheless necessary for life. Therefore, they must learn to manage their money to have a carefree and debt-free future.