Teaching your children the ways of life is the essence of parenthood, and part of this is teaching them how to be efficient in personal finance management. Don’t worry; you don’t have to do an all-out lecture on finance and economics.
Here are six simple tips parents can do:
First is to set an example. Children learn from what they see. If they see you taking charge and saving money for yourself, they will follow it soon after.
Second is to patiently explain. The kids may not get what you are doing, so it would be best to explain things step-by-step. Take advantage of the child’s natural curiosity and make them understand why saving money is always best. Have the patience to explain things on their level by using simple words or by showing them how to do it.
Third is to use tools. Employ the use of coin banks or piggy banks. A great way is to let them design their coin bank according to their preference. Let them personalize it so they feel more motivated to use it and save money.
Fourth, harness the power of motivation. Children are the easiest to motivate. The trick here is to know what motivates them and to use that piece of information to your advantage. If you see your children gets motivated by the prospect of a new toy, you can tell them they can use the money they saved to buy the toy they have been eyeing.
Fifth, let the children do it themselves. As parents, it is always a struggle between the heart and the brain during times you need to teach your children a valuable lesson. It is only a parent’s natural instinct to go in and help, but there are some times we should get a hold of ourselves for our children’s sake. The temptation to add to their savings so they can buy their new toy is very huge. Wouldn’t parents want to see that smile on their child’s face? Yet, we should always put in mind the value we are trying to teach and refrain from doing so. Later on, when we see the kids become financially-stable adults, then will we realize the importance of letting the kids learn for themselves.
The sixth tip is the most important. Stay true to your word. If you said the money saved will be used to buy a new toy, so be it. Using it for another, other than what was promised will only give a bad impression. This may result in your kid not wanting to save anymore. Do keep your word. Receiving their expected reward will only add to their drive to save more money in the future. Plus, your children will come to learn that you keep your word, and that saving money has its rewards.
Indeed, teaching your children how to save money is the first step towards effective personal finance management in the future, and ultimately results to financially-stable adults. Everything must always start at home, so make sure you will be able to teach your children well.
Irina Webandyou is a finance advisor and business writer. She writes articles about finance, business, instant payday loans and debt consolidation.