Being ready for adulthood’s financial challenges is a priceless wisdom you can teach your kids. Showing them the basics — proper budgeting, spending, and saving — will establish good money habits for life.
Physical money, such as notes and coins, starts to “disappear” during this time of credit cards, online shopping, and internet banking. As a result, kids don’t often see people buying products with a physical form of cash. As a further result, kids become unfamiliar with the effect of actually holding money.
This makes it hard for kids to get their heads around the cost of things. The “invisible” money becomes abstract, an unlimited resource, as opposed to hard-earned and of utter importance.
Help your kids understand where the money comes from and how it’s earned. Through real life situations and examples, you can teach kids the value of money. Here are a few approaches on this:
Explain to your children that after you worked hard, your company pays you and the ATM holds the money. It’s not just a machine in the wall where money comes out.
When you take money out of the ATM, you’ll have less to spend later. When they’re a little older, you can inject in the concept of a bank account.
Explain to your kids how items are priced at the supermarket. They can get the same product on varying prices based on brand, quality, etc.
It’s also an opportunity to train them how to shop around for the best price. Get them to compare prices and pick the cheapest one.How To Teach Your Kids About Money Click To Tweet
Tell your kids that electricity and internet connection, among other monthly utilities, cost money. Show them when you receive the bills. Explain that the amount of electricity you use affects the amount you pay, same with the others.
In their head, this can create a connection to the ATM, to your work, to working hard, and the time you spend away from home. It can help the kids realise and be mindful of their electricity usage, which will trickle down to other utilities.
On the topic of costs and spending, involve your kids in discussions on family budget to paint a bigger picture.
Show the kids the weekly shopping list. Explain the amount of money your family has to spend on a weekly basis and how it’s actually spent. This can result to better understanding the costs of family life and how much can be saved for other things.
You can also help the kids put together their own budget. There are budgeting apps online that can help your family with this process.
You could assign kids house chores — setting the dining table, making the bed, washing up and tidying their room — in return for pocket money. Pocket money can help kids better understand why people get jobs and the value of money in our lives.
This encourages a good work ethic and reinforces that one gets paid if the job’s done properly.
Suit the pocket money earned on your family’s situation.
Kids can put their pocket money in piggy banks, which introduce a fun way of learning how to save. Piggy banks serve as starting point and are more tangible entity before they open their bank accounts when they’re a little older.
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Quickle charges an establishment fee of 20% as well as a 4% monthly fee, both calculated at the amount borrowed. Kindly note that other fees may apply.
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