Saving Starts Early: What Your Child Can Learn About Money

Savings Starts Early: What your child can learn about moneyWhether it’s a new video game, a plush puppy, or an ice cream cone, children’s wants usually don’t take money into account. But while being young means not having to worry about mortgages and grocery costs, this doesn’t mean they don’t need to know some financial basics. By teaching them some simple and easy to understand lessons about money, you can help your children to have a strong foundation in understanding money.

Start Simple!
In order for your child to understand money, you don’t have to teach them how to read stocks or run an accounting firm. Start their lesson with the basic concept of what money is. Explain what you can buy with money, and show how different bills and coins have different values. You can even give short money math lessons with toy money or implement these lessons into playtime to strengthen your child’s ability to understand money. By starting simple and allowing your children to see how different items cost different amounts, they will better understand how simple financial matters can be.

Saving Up and Earning
Money burns the fastest in the pockets of kids, but this doesn’t mean they can’t learn the value of saving. By using an allowance to award children for doing chores, they can learn the value of working to earn money, and gives them the chance to pick and choose how to spend or save their own money. If your child is interested in a specific toy, set them down to talk about its price and help them plan out how they can save to buy it themselves. These steps teach your child about the limitability of money, the benefits of savings, and how hard work rewards with pay. By using an allowance instead of toys as payment, children can also understand how money can help them.

The Hard Truth About Money
One of the most heartbreaking things is spending money on something that was a waste of your money, and with all the toys, games, and kid-designed products on TV, it is likely your child will occasionally spend their allowance on an item that wasn’t what they hoped it would be. Despite how bummed your child may be, this is a good time to not only console, but to teach your child money can only be spent money once and then it’s gone. This can impress on children the importance of not rushing to buy every new toy advertised on TV, but picking and choosing what they want to buy carefully.

Money Is For Helping Too
Teaching your kids about the blessings of sharing and caring for others with their money is just as important as their learning to earn money and the benefits of savings to. Concepts like buying gifts and helping others with their money can start with the smallest of donations. Encourage your children to put a small part of their allowance towards charities or church donations. Give your kids a little extra spending money at Christmas so they can buy gifts for the family. Encourage them do some chores for favors to friends and neighbors to simply help them. But most importantly, teach by example by giving a dollar to your child to give the Salvation Army or Red Cross stations in public places. By gently encouraging your child to help others, they will not only learn about money, but about sharing and generosity as well.

Childhood is no time to burden kids with the worries and fears of finances, but is a terrific occasion to teach your child key concepts about money, savings, frugality, and even helping others.

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