Pay kids commission, not allowance. Kids should learn the relationship between work and money.
We all want the best thing for our kids and probably, we will do anything to see them happy. But, at the same aren’t we forgetting something; how to teach your kids the value of money?
- Make them your budget assistant.
- Take them to shopping and bank.
- Teach them how to obtain money.
For parents, the biggest achievement is their kid’s smile and they can go up to any extent while fulfilling their needs. Every time a kid express his willingness for a thing, parents try to do everything possible to get them and often end up spending money even more than they could afford. In many cases, this habit of ‘purchasing happiness’ leads to regret.
To a certain age, this is fine. We cannot expect an infant to learn the home finance. But, once they are old enough, parents must tell them about all the sacrifices they have to make, while meeting their kids’ demands. The best thing would be to have an open discussion with them about the value of money.
Am I supposed to teach them about family debits and credits? I don’t think so, a kid can understand ledger books.
No, you are not going to teach them about journal entries. And, by the way, they are not going to understand those formulas as well. They are kids. But, you need to make them understand that money is not unlimited and is not available all the time.
You need to have your kids in confidence and you should be doing it in a sympathetic way. Don’t expect them to understand the stats. Kids are emotionally unintelligent and you need to handle them emotionally.
Dear parents! Try to make discussion on a lighter note and do your best to keep them as smoother as you can because even if a more serious discussion with the children about an important topic can scare them. Don’t make them feel guilty and don’t embarrass them.
If they are asking for things that you cannot afford, you must understand that it is you at the fault and not they. You failed to teach them the value of money at right time.
Things you should talk with your children about money and value
The Importance of Different Things
It is essential to explain to children that not everything is important and there are certain things that are more important than others. For example, food and necessary household are the main priority, while sweets and toys are not.
Take them shopping with you and explain to them that in the beginning, they need to put the most important things in the cart and then, depending on how much money remains, and other things.
The Way Money “Works”
Children must understand that when you buy certain things, you stay with less money. You can even tell them gradually over a month, how much money was spent and how much is left.
This way, you are going to teach two things; spending wisely and saving intelligently. At the end of the month, you can tell them how much money started their month with and how much are left with at the end.
Make them understand that – should you have not cried for ‘x’ thing, you could have purchased PS4.
How To Obtain Money
You must explain to children that parents have money because they work so hard. To show them, you give them an easy task in the house, you do not normally do, and then, symbolically rewarding them with something to their liking.
Once children understand that money is a reward for the work, they will be more careful about what they ask for when you go shopping. You need to teach them how hard is to obtain money.
It is very important to encourage your children to save money by buying their piggy banks. Next time, they ask you for something, get them a piggy bank and ask them to save all the money they have received or will ever receive.
Ask them to keep accumulating the money until they have enough to buy that certain thing. This way you are going to teach them how to save and how to have the thing they want.
After the children have realized the value of money, you have to learn to spend responsibly. Instead of buying the first toy they see on the shelf, helping them to think about whether they really need it.
You need to ask them if they do not see anything more important to spend that money on. Also, teach them, once they have decided to buy something, then they must find the best possible price.
Children should learn to look for a good price. Do not make them an impulsive buyer. Finally, every child deserves to enjoy things and desires, but should manage to keep a balance.