Being parents is nevertheless, a great responsibility that can be a real challenge especially for new parents. It is not easy to raise a child to become a good human being, cultured as well as educated. There will be times when you feel not confident enough and have doubts about raising a kid but that’s only temporary. Children are a blessing that do not only bring people together but make adults who are called as parents to be much stronger and tolerant human beings.
One aspect of parenting that can be a real challenge is teaching your kids about money. As parents, we may have issues of our own when it comes to money but do not let hinder you from teaching your kids how to utilize money to the optimum level through spending and saving. Of course, by right you should have known more than what you’ve done with money so far, and by hook or by crook, you have to play that critical role as parents in shaping your children’s behavior towards money and finance.
How and when to start teaching your kids about money?
You can start right away when you children have learned the essential of counting and are able to recognize the value for each dime and dollar. When they are at this stage, they are ready to be taught on how to organize their own money and to embark on their initial financial strategy, and obviously with your guidance.
Children as young as three years old are able to recognized money in coins and learn how to count although they may not have the clear idea of what money value may have been. At this age and onwards too, children are able to understand that apparently money can be traded off with objects and stuffs. At the age of 7 until 9, during the early school years, most kids are already been introduced to pocket money. They will be given a certain small amount of money for them to use at school or outside of school. The main intention is to give the opportunity for your children to try to make his or her own budget, spend and save. Experts also are in consensus to say that pocket money should be closely related to chores. This is like some sort of a way to make your kids understand that money doesn’t come easy and why there’s a need to save some - for future use.
Not everything should be base on chores. For example if you’re giving your child about $5 a week - that will be on a fixed amount. If they wanted more, they should earn it by a multitude of ways possible, like completing certain chores, being good and behaving themselves, study and performing well at school et cetera. However, do not tend to overexercise the system. Only give the amount that’s appropriate for kids their age.
At the age of 10 to 12, you can start bringing your child to the bank to open a bank account or make a deposit of the amount of money that they have been saving so far. Let them fill in the deposit form themselves and occasionally remind and make them understand what’s in it for them when they save up money and have it banked in. Sometimes, financial institution even provide gifts for junior accounts which you can make use of to attract them to save more.
At the age of 13 to 15 years, you can start exposing them to funds and shares. Perhaps you can explain to them why fixed deposit is better than savings account and many more. There are also several trust funds, insurance scheme that could be beneficial for children and teenagers alike available to the public today.
As the grow older, you can get them involve more with the family finance by including them in small scale budgets like what to get for groceries for a certain amount of money - no more no less. Also, don’t forget to remind them that what is necessary should come first and then comes leisure. Don’t think it is not important to try to explain it to them of why you traded that luxury car to a more convenient and cheaper ones. By getting them more involve with the minor financial matters of the family, you are able to teach them the meaning of having a family, a little bit about finance and how it things should works around.
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