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Honing the financial skills is very important to navigate life smoothly. Financial literacy should be considered as one of the most vital lessons that children should learn and carry them even into adulthood. To encourage young kids to understand the value of money, parents should take an early initiative to help them start the right foot in their financial life. Since no school has a subject that teaches money lessons, it is important for you to take this essential step and educate your children about money early.
Turning your daily activities into learning experience is a perfect opening for you to teach your child about the use of money and its value. Children are never too young to learn anything and so you can easily start with child’s imaginary games or play pretending like a store owner. In this blog, let us discuss few interesting ways to teach your kids about cash.
Take your child with you when you visit a grocery store and allow him or her to identify the cost of the items in the list. Teach them to shop by buying alternate items that cost less, but without compromising on the quality. You can also give them a small amount and test them if they are able to purchase the maximum amount of food within the limited budget.
Give your children a small amount so that they can spend according to their wish. They should learn the value of cash and not overspend. Encourage them to save a part of it for their future. If your wallet is free for them, they will never learn to manage their expenses within the budget.
Children usually demand toys and games when they visit the market. Use this valuable opportunity to teach them how to save cash. Ask them to save their allowance to buy what they want, but make sure not to pay them high amounts as the purpose will not be fulfilled.
Allow them to adopt a budget line item: Older children can often understand the concept of budget. Give them a single budget category every month to manage and allow them to choose the expense type. They may make mistakes initially, but they will soon learn to manage their overall finances.
Open a bank account: As your child grows, open an account for him and help him to keep track of his savings. Let him read financial, educational materials for more knowledge. Watching banking transactions in the bank can also help children to manage their own accounts independently.
To conclude, we can say that teaching your child the value of money will surely not happen instantly. Take small steps and let them experience it through practical examples. They may make mistakes initially, but the valuable lessons will help them to be more money savvy when they are adults.