How to Teach Your Kids to Be Economically Wise!

economics

1. Talk to your children about money and show them how you manage it

2. Chores for pocket money 

3. Make financial decisions as a family 


• There is no doubt that it is difficult to teach small children such a principle, but the ability to postpone gratification can predict how children will manage with money when they become adults. Therefore, children of these ages should learn that if they really want something, they have to wait and save to make it possible for themselves. In these moments you have to be tough and not make up the difference in order for them to buy what they want

• At this young age, you should explain to them the real reason why you aren’t buying them something. Instead of saying that you do not have money, you should say that right now you are not in the store to buy them a particular item. In this way, they will soon realize that not every shopping trip means they need to get something..

• Make sure that the product they are saving for is not too expensive so that they eventually can afford it. A creative and highly recommended way to help them save is to place three jars - each with a different sticker: one to “save”, the other to “spend,” and the third to “share”. Now, each time your children receive pocket money, the final amount must be divided equally between the three jars, so they will be able to control their expenses more easily, they can experience the feeling of waiting, learn to be more patient, and know how to save for important things.
• At these ages, it is important to explain to children that wise choices must be made before spending the money, and that once it is removed, it will not return to the savings jar. As in the previous step, you must be careful to distribute the money between the three jars, while being very clear about what the money is being saved for.

• You can go a step further and give your child 10 dollars when you are in the supermarket, asking him to make the right and most worthwhile decision when purchasing produce. When doing this, use questions to guide him or her such as: "Is this a vegetable that we really need?" "Is it possible that elsewhere we can buy the same vegetable at a cheaper price?" And so on. These actions are designed to give children the experience of making daily financial decisions which will give them a sense of security when they have to make similar financial decisions later on in life. 
• At this age, you can move from the idea of saving for short-term goals towards long-term goals. Show them their ability to invest their money in a savings account which will give them interest. These ages are characterized by children’s desire to buy here and now, which causes them to avoid long-term investment, so it is important that you present them this option most clearly by calculating the money they could save if they opened a savings plan.

• For many, it may seem that 11 is too young to start talking about a savings plan, mainly because children do not yet have a bank account, but you can help them with this. One option is to allow them to deposit money into your account and you manage the interest that they receive. Another option is to go to the bank and ask them about kid savings plan, many banks offer this service.
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5. Allow them to experiment with the credit card 

 6. Allow them to experiment with smart investments 

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7. Instill in them a sense of entrepreneurship 

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