Teaching children about money is a key responsibility of mums and dads around the world. The earlier parents educate their children about money the more chance they won't fall into the credit trap many face today. Our economy works primarily on money. The sooner children learn about how money works the more responsible they become in their own finances. Parents have the skills to teach children about generosity, spending, saving and future planning when they teach their children about money.
Teaching kids about money can be lots of fun. Going through each denomination and finding out what they look like and how much it's worth is a game in itself. When a child understands 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 we can teach children how much everything is worth. You can decide what price your grocery will be. Start with one item at a time. First teach your child to give the exact money. Progress to giving bigger notes and teach kids to work out the change. This game will help them better understand money and what they can get for their dollar as well as improve their maths!
Money is what makes the world go round... or that is what we are told. In every situation mums and dads can find ways to teach their children about life through money. We can teach generosity through money. Generosity comes from our heart and mind. It's a decision to give. Giving is a selfless act and through teaching children about money we can successfully show our children a real concept of loving people.
Charities are always looking for donations. Some people go to church and give their tithes. Annual charity raising events occur and ask us to stretch our hands towards them. Explaining to your child what is happening and giving them the opportunity to give will help them 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 your children need to accomplish to be successful. Through saving you can help them prepare for the future. There is evidence that items purchased by a child with their own money are treasure more by them. Savings will prevent children falling into the credit trap later in life. Children will know that with proper preparation they can avoid the credit trap. Teaching children to pay themselves first through savings will teach children about compound interest and the magic treasure at the end of time.
Never underestimate the potential your 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.