Dave Ramsey said, “Money moves from those who do not manage to those who do.”
No one said it more clearly than Dave Ramsey that money management is of utmost importance. Managing money in itself is a skill that even adults lack. In today’s time, people know how to earn money but don’t know how to manage it, be it an adult or teenager.
The root cause of this issue can be traced back to schools as we are only taught theoretical topics but ignore one of the essential life skills, that is, money management. Hence, it is always a good idea to inculcate the idea of managing money from the early years of children. This will help them make informed decisions in life.
Now, parents tend to focus on teaching their little ones about money management. They must understand that kids follow actions, not words. Children tend to learn from their parents and the people around them. Besides movement habits, children also grasp the saving and spending acts of their parents. To make them understand the true value of money, parents need to integrate promising habits into their daily routine.
Early practices like putting money in a piggy bank or envelope have now altered into digital money management which is making kids pretty smart and technologically sound. The age range of 9-12 years is the learning stage where kids grasp every knowledge quickly. Keeping some money aside regularly can help them understand the value of money. The allowance can be put in an interest-bearing account so as to inculcate a habit in an early stage.
⚡ Share, save or spend wisely: Getting some chores done to earn some money can help children learn the importance of money. Besides this, it is equally important to teach them about saving, spending, and sharing wisely. Spending is easy for everyone but saving or sharing are vital. Inculcate the habit of keeping some money aside for charity or saving for the book they want to read.
⚡ Allow kids to compare and shop: Kids in elementary school can easily understand some basics of comparison shopping. So, you need to allow your kids to make a list and look at the sales to note where some items cost minimum. Next, you need to take your kids to grocery shops and teach them how to compare products or brands, resulting in significant savings.
⚡ Teach the importance of giving: Besides earning or saving, it is essential to help out less fortunate people. Explain to your little ones why they need charity and motivate them to give some of their allowances to those who aren't fortunate. You need to know what your child feels strongly about and show them some ways to help. For example, if one loves an animal, then as a parent, you must help them raise some funds for an animal shelter.
The sooner the kids understand the importance of money, it will be better for them in the future. With neo banks like Fyp, managing money wisely becomes a cakewalk for youngsters.