Children who grow up money savvy as they get older, they tend to develop a healthy relationship with their finances. The earlier they learn the value of money and how to be creative with saving, the more they learn to spend wisely. Teaching your children entrepreneurial skills and getting them into a lifelong habit of investing some of their money will ensure they are financially savvy. There are various ways to instill this healthy attitude towards money.
Make the kids work for their allowance
Money is a good reward for effort, and working hard for money can make children appreciate every penny. If children are given papers, they may grow up expecting papers. They don’t need to graft hard for their contribution, but they should learn to exchange extra work for money. Whether it’s washing the dishes, mowing the lawn or helping to unpack the groceries, children can create a routine work for money.
Encourage children to save for something big
Instead of giving the kids their dream toy for their birthday, have them save some of their allowance until they have enough to buy it. In this way, they will take care of their valuable possessions and realize the true value of the labor that they bought their toys. Saving for something and then buying it with your own money will help children feel independent. It also makes them care about things.
If it’s an activity they’re interested in, like jet boat trips to Lake Mohave, they can save into this fund separately. Sometimes it’s good to create savings pockets for children, where one pocket is for material things and the other is for fun.
Teach them about finances
When the children are old enough, discuss the value of money and how credit cards, loans and banks work. Give them a pile of coins, let them count their money and let them decide how much to spend or save opening a bank account in their name. Spending only what you have and living within your means should be a key point of discussion.
Teach children to say no
There is a difference between being generous and careless. Children should not give their money to friends and should learn how to make smart decisions about borrowing money. Children’s learningsaying no without guilt or pressure to spend money is a valuable lesson.
Help children start their own business
Entrepreneurial creativity and entrepreneurship must be encouraged. Help children identify business opportunities by making them think outside the box. Ask them to write a list of things they like to do that others may not like to do. This can start the process of thinking like an entrepreneur.
Teach them that people pay for services and help with things they don’t enjoy doing. Examples include washing cars, helping with electronics, and carrying things. Children also need to understand that starting a business requires finance and how they should proceed increasing capital. They can use their savings or get friends and family to invest.
Raising financially literate children
A healthy relationship with money starts when you’re young and it all boils down to understanding finances and respecting money. The earlier these values are instilled in children, the better chance they have for financial freedom and success.