How to teach kids about money
In today’s society, money stands in for values. When choosing a product or service, the hard-earned money that you spend on them represents your desire and appreciation for those things. Money is how we trade value for value.
This is not evident to young kids, who may have abstract or misguided ideas about money. I remember going to a toy store as a little kid with a pocketful of change, thinking I could buy the biggest toy. The process of values and trading made no sense to me.
You are the example
This is an important fact to remember. Regardless of your teaching tools or how you explain money to your kids if you don’t follow your own rules, they probably won’t understand them.
Don’t allow yourself to gamble with money around your kids or joke about it in the context of impulse purchases. Show them you’re responsible with money whenever they’re around. If they see you throwing your cash away, they won’t understand what it’s worth.
Teach them about cost
How much does it cost?
One of the most common results of beginning to teach a kid that money is worth something is for them to spend it immediately on something they want. This is their immature interpretation of the fact that money has value.
By encouraging saving, you get the next big point across, which is that money isn’t just a tool for getting things but an investment in life. Start out by encouraging them to save for something bigger. Stop them from buying a small toy now so they can get a big toy later.
Kids need guidance when it comes to money. Buying and selling is an abstract process that adults are used to, but which is foreign to small kids.
Providing good examples to follow and providing them hands-on experiences with earning, buying, and saving, you can make this complicated process much clearer to them. In today’s fast-paced world, there are many important things to teach your kids – the earlier, the better.