Describe your job to your children. You may even bring them along one in your workplace and give them a tour. Then, introduce this video of a farmer that gets paid for supplying milk. This short video explains the concept of money to children in a simple and animated manner.
2. MONEY IS NEEDED TO PURCHASE THINGS
Like the farmer in the video, he needed money to buy what he wanted. Help your child understand the concept of being able to buy things by identifying items that cost money (e.g., house, car, table, or iPhone) and those that are free (e.g., hugs and kisses from Daddy).
3. THERE IS A DIFFERENCE BETWEEN NEEDS AND WANTS.
When you are shopping with your kid, highlight what are the essentials such as vegetables and fruits. Then, let your him pick the items that are considered as wants.
Tell your child that an individual must wait before buying something he/she wants. Make him realize this by putting money into two jars: 1 for savings, 1 for spending. Ask him to save a dollar of his allowance for savings and a dollar for spending every week.
Aged 6-10
4. IT IS GOOD TO COMPARE PRICES.
Teach your child how to look around the shops first before buying anything in order to get the best deal. In spending money, choices must be made. So, include your child in small decisions to increase their awareness.
5. THERE ARE DANGERS IN SHARING PERSONAL INFORMATION ONLINE.
Discuss to your child how dangerous and costly it is to enter personal information (e.g., address or bank account details) online because someone may steal it. Encourage purchasing online only when you are beside them.
6. INTRODUCE BANKING AND INTEREST.
Describe how the banking and interest works. Savings account will protect your child’s savings and it will also generate more money due to interest. You may open a junior bank account that you supervise. Let your child watch this video to understand the concept better:
Money gives people, of all ages, the decision-making opportunities they need. Educating your kids to make wise money decisions earlier on will affect their finances in the long run.
The most important thing you must do is to make saving money as fun as can be. Here are 5 Ways to Teach Kids About Saving Money…
1. MONEY INTRODUCTION
Once your children can count and discriminate, introduce them to the different denominations of money. Take a conscious effort in providing them information about money and savings and be ready in answering their countless questions.
Watch this cool way to introduce money and its values:
2. SET UP BUYING GOALS
Setting up realistic goals is the foundation to learning about the value of money and saving. Ask your children what they want to buy with their money. For instance, the toys, video games, and stationery items are the things they shall save money for. These goals will help the children learn to become more responsible.
3. USE A PIGGY BANK OR A MONEY JAR
After identifying the short-term goal, provide your child with a small piggy bank or a money jar where they can fill up their savings with. Have your child draw the picture of the specific toy on the side of the piggy bank or the money jar. Through this, they will be motivated to get what they want.
You may also want to help your child understand that some items will take longer than others to save for. For these long-term goals (e.g., going to Universal Studios), provide them with a bigger money jar.
4. ENCOURAGE SAVING
Be the good example to your children by putting some of your coins into their money jar. Since most young children want to be like their parents, seeing you do it will provide them with inspiration to save.
Aside from this, you may give them money in denominations that encourage saving. For example, give your children a $6 allowance that consists of three 2 dollar bills. Tell them to set aside $2 for their money jar.
5. PLAY GAMES INVOLVING MONEY
Image Credits: Rich Brooks via Flickr
As I said, the most important thing you must do is to make saving money as enjoyable as can be. Play games that teach children about financial concepts. Such games include Monopoly and The Game of Life. They will not only have fun but it will also shape their money management skills.
