Teaching children about money is a primary responsibility of parents around the world. It's important for parents to educate their children early so they won't fall into the credit trap many people face today. Money is a means to how our economy works. The earlier children learn about how money works the more responsible they become in their own finances. Parents have the ability to teach children about giving, spending, saving and investing when they speak to their children about money.
Teaching kids about money can be fun. Just learning what each denomination looks like and how much it's worth is a game in itself. Once a child has an understanding that a 50c is of smaller denominational value compared to the $1 coin even though it's bigger in physical size. It's time to play the game of make-believe shopping. You can use a toy cash registers and plastic food to pretend you are in a supermarket. At home it's safe to teach children how much everything is worth. You can use catalogues as a guide to what price you may price your grocery. Start with one item at a time. Teach your kids to give the exact money first. Progress to giving bigger notes and teach kids to work out the change. They will have a better concept of money and their maths won't be too bad either when you play this game with them!
Money is what makes the world go round... or that is what we are told. In every situation parents can find a way to educate their children about the basics of life through money. The teaching of generosity comes from our heart and mind. We need to decide to give. Giving is an act of selflessness and through teaching children about money we can succeed in giving our children a real concept of loving people.
Charities are always looking for donations. People go to church and give their tithes weekly. Annual charity raising events occur and ask us to give towards them. Explaining to children what is happening and giving them the opportunity to give will help children place priority on others less fortunate than them. A regular giver will make it second nature to help and love others.
Last but not least, saving and investing. These are crucial learning curves children need to be successful at. Through saving you can teach them to prepare for the future. There is evidence that children treasure what they buy with their own money more then if it was given to them. Savings will stop children falling into the credit trap later in life. Kids will know that with proper preparation they can avoid the credit trap. Pay yourself first principle through savings will teach children about compound interest and the magic treasure at the end of time.
Don't underestimate the potential a child has when it comes to money and what they can achieve from it. Hence teaching kids about money should not just be focused on how they physically save or spend it but the emotions and thoughts that apply with this learning process.