Talking about money can seem rude or uncomfortable, but it’s a skill that parents must master. After all, kids need guidance about how to deal with finances and parents are always their primary teachers. If your child needs to learn about the value of money, you should try some of the activities below.
Explain how money works
One of the best ways to help your child learn the value of money is to talk about how money works. It’s not unusual for children to think that money simply appears, so it’s going to be up to you to explain how you earn your money and how it works. Explain to your children basic concepts like why you might deposit a check in the bank, why you are keeping track of your purchases on a ledger, or even why you have to pay bills. This can put many things in perspective for younger children.
Give an allowance
The next step is to give children an allowance of their own. This is something that has to wait for a child to be appropriately mature, of course, but giving your child money that he or she has to manage for extra purchases is a good idea. This will allow your child to realize that money is not an unlimited resource and that spending money on something today may mean that there isn’t any money left to spend tomorrow.
Make connections between work and money
It’s never a bad idea to make a connection between your child’s work ethic and the amount of money that your child has. If you know that he or she is saving up for a big purchase, allow your child the chance to do extra chores to earn that money. This will not only show your child that working hard can help him or her to accomplish goals, but it also makes the accomplishment of saving up for something special seem all that more important to him or her.
Open a savings account
As your child gets older, a savings account will become an important tool. A simple savings account is the natural replacement for a piggy bank and can provide some real-world experience for those children who are starting to get closer to independence. Some schools actually have in-house banking programs that allow children to deposit money and earn interest, so look into those if you are trying to teach your child an important lesson about how to save money.
Encourage alking about finances
Finally, make sure that you talk about your family’s finances with your child. When your child sees you working on a budget or paying bills, he or she will both get a glimpse at adult life as well as a good example of how to work with money. When you go to the grocery store, talk to your child about why you buy one brand over another or why you use coupons. If you go on vacation, talk about how you had to budget money for that trip. These discussions will help to shape your child’s relationship with money in the future.