A popular saying goes “you can’t teach an old dog new tricks.” Thus, when it comes to developing and nurturing good habits, you’ll have to start as early as possible. For this reason, it’s important that children should be taught or at least be familiar with money-saving habits while they’re still young so that they grow up into adults with good attitude towards their personal finance.
Financial literacy is one of the best treasures you can give to your children. And when they grow up wise in handling their money, you can be proud of yourself. But before that happens, you still need to do the conscious efforts of training (in both obvious and non-obvious ways) your child to develop money-savvy habits in the beginning.
Don’t worry, as we have you covered on that matter.
1. The habit of resisting most things they want to own
It’s definitely a common scene wherein children are throwing tantrums in shopping centres because their parents won’t or can’t buy the items the little ones want. At this stage, you must start helping your children understand that money is not unlimited. While the concept of money may seem strange to them at the moment, it helps when you let them choose one item from another and tell them they can’t buy both or all.
2. The habit of identifying needs and wants
As they grow older, they will somehow develop a concept of needs or wants e.g. he wants to own the newest game console or he needs a new school bag because his current one is torn and old. It’s best to give them this concept even before the stage wherein you will regularly give him pocket money. In this way, he will have more confidence in balancing his expenses between needs and wants by the time he will be receiving his allowance.
3. The habit of setting aside money for savings
Sooner or later, your children will be getting money other than from the regular allowance you give them such as the cash gifts given by relatives or monetary rewards for a job well done. So before things can get complicated, help them nurture the habit of saving 10% (or any amount) of the money they receive. You can use large transparent jars to keep the money. In this way, children can excitingly watch their funds grow through the months. Alternatively, you can open a child-orientated bank account, which is much better considering that money in the bank can earn small interest income regularly.
4. The habit of budgeting and monitoring progress
Once children learn about numbers and mathematical operations, you can introduce the concept of creating a budget to help them monitor their savings. This is also a great activity to do with your kids when they want to buy something they expensive and you all have to plan how much to put into the savings account to achieve your goals. It also provides a chance for you and your children to discuss ways to earn or save more money.
5. The habit of analysing expenses and making appropriate changes if necessary
Help children gain the habit of listing down their daily cash inflows and outflows, but bear in mind that not everyone will want to do this religiously especially those who get overwhelmed quickly with too many details. At the very least, introduce to them the concept of listing their expenses as they incur. This can be very helpful at the end of the month when you can sit down again with your children to help them analyze their expenses and see if there are spending habits that need to be curbed. This will also be a great time to create financial goals in the next month or so.
6. The habit of working smart
There are many ways children will learn about the need to work in order to earn money such as observing the adults they look up to, receiving rewards after work or simply playing board games focusing on money management. But the most important thing is that you should be there to teach them about working smart versus working hard i.e. they should learn that it is possible to produce quality output at a shorter period of time than usual as long as you know smart and practical methods are employed. By working smart, they can possibly earn more money in the future since they will have more time to do more tasks or handle more projects.Recommend0 recommendationsPublished in