5 Ways To Try Introducing Your Kids To Finance Early
Money has a huge impact on people’s life. People do not understand how it works, which often leads to crushing debt. Moreover, we also hear of people falling prey to scams, high-interest loans, and making terrible investment decisions due to having little knowledge about finance.
Teaching children about financial literacy will go a long way in preparing them for when they become adults with more responsibility. There are several ways to effectively impart financial literacy to kids.
1. Have the ”talk” with them
Research shows that a great deal of parents aren't comfortable discussing finances with their kids. Notwithstanding, for your child to have a financially healthy life, they must learn about how money work at some point.
You can start by explaining the concept of saving with them and check in on them whether weekly or daily to keep them on track.
2. Set up a joint bank account for your kids
Minors can’t open up accounts by law. A way around such a situation is by opening up joint accounts with your kids. The account is the property of the child but managed by the parent until the child turns 18.
For kids with ages lesser than 6, it might be preferable to get them jars or piggy banks for them to save money.
3. Encourage them to engage in paid activities
For the kids to truly grasp the concept of money, they need to learn what it feels like to earn money. Encourage them to start carrying out activities like mowing lawns, cleaning cars, and babysitting for a commission.
To further drive home the point, let them use their earned commission to pay for their wants. This will teach them frugality with money.
4. Practice makes Perfect
When giving children some responsibility in handling money, it takes a lot of willpower not to interfere and correct their mistakes. Failure is a part of success. Any mistake made now is one that is already prevented in the future.
There are books you could get your kids like Finance 101 for Kids: Money Lessons Children Cannot Afford to Miss, Investing for Kids: How to Save, Invest and Grow Money, and many others.
5. Be an Outstanding Example
Children learn things just by noticing others. This is called observational learning. A 2014 study shows that children develop habits by nine. Saving for the family can show them the importance of handling money well.
Conclusion
As a parent, laying the right foundation for your kids gives them the chance to have a brilliant financial future. Building healthy money habits at a young age prepares kids for financially easy lives.
