How to Teach Money Management to Your Child?

Money is an indispensable resource and we have to be wary of how we utilize it. It takes us a long time to get the hang of the concept of money management. But, what if we teach our children from a very young age so that they won’t have to face the same challenges as we did?

Children are fast learners, and they observe everything very keenly. We have to teach in a way that they will remember these lessons for their entire lifetime. Here is how we can teach our children money management so that it has a long-term impact on them.

Give them pocket money

You can give your children a fixed amount every month for them to spend on whatever they want. It will also give them the independence to purchase what they want. They will also learn a very important lesson, ‘with great power comes great responsibility.’

Sure, they will sometimes recklessly spend their pocket money, but after one-two incidents, they are going to get the knack of it.

Let them handle some expenses

How long will you do your children’s work? At some point, you have to start letting them do it on their own. So why not start as early as possible? You can let your children handle some money-related matters appropriate for their age.

Things like shopping for their clothes, buying stationery, and so on can be done by kids as soon as they start growing up. If they want something from the market, then let them go on their own and purchase it. It is going to increase their self-esteem and also give them some practical experience with money.

Let them be accountable for themselves

Children are bound to bungle it up once in a while. And that is alright. We just need to teach them to be accountable for themselves. If by any chance, they lose some money, they need to hold themselves accountable for it.

Your job is to not panic, stay calm, and let your children do their job. If they mishandle some money, then don’t stress out. Instead, help them overcome the situation. It will be more helpful to them, rather than getting angry at them for their blunders.

Let them handle money-related chores at home

There are many chores in the house that require a trip to the market. You can sublet that work to your children. You can give them tasks like picking up groceries, buying stationery for the house, buying miscellaneous items, etc. your children will get a hands-on experience of the real world.

When we want to make our children independent, more often than none, things like surviving in the day to day world are missed out while focusing on the bigger things. We focus on making our child’s careers and making them successful.

Let them explore different options and then discuss

There is so much involved in teaching financial education for kids as it involves understanding and implementing theoretical and practical knowledge for same. You can teach them how to manage money, different ways to invest, different ways to save, etc. This way they can learn it in detail.

Give them money to invest and grow

Children need to understand the brilliance of investment. Our money makes us more money because we chose to put it in the right place. Isn’t that amazing! It is as simple as that. Give your children an opportunity to learn it. There is a strong possibility that they will make some bad investments along the way, but that is just part of the learning curve, isn’t it?

Let them waste

The lessons that are etched in our brains are often the lessons we learned from standing up after falling. When we go through an experience we remember the learnings it taught us. If we want our children to learn about money, we need to let them fall a couple of times till they learn to pick themselves up.

When we give our children money, let them make mistakes, let them waste it. We do not have to go into a panic mode the moment they falter. When they will falter, that is the only time they will understand.

Lead by example

Your children observe your every move. They will follow in our footsteps in ways that we cannot even imagine. If you manage your money smartly, then there is a strong possibility that your children will also learn the same.

On the downside, if you are an erratic spender, and you do not plan your money properly, your children are going to make note of that too. So, if we want our kids to learn something, you need to learn it first. The chances are that when your children will see you, they will understand on their own.

Let us look at a story. There was a king who fought the toughest battles to win a kingdom. He did everything in his power to win it, and he finally got it. But, the downside was that the king did not know how to run the kingdom he had just won through his hard work, battle skills, and bravery! Slowly the kingdom started losing its splendor.

Money is a very powerful resource that is at our disposal. It is also one of the most dangerous things we will ever handle. Hence, we need to know how to be able to manage it, and our children need to be taught as well. We cannot afford our future generation to be clueless about it, it is far too crucial to be left unattended. And, it is high time that we teach our kids about it.