One of the main criticisms of the formal education curriculum is its inadequacies when it comes to preparing students for the ‘real world’. One of the skills that it fails to properly address is money management, and specifically the value of money. This is unfortunate since one’s success as an adult is heavily dependent on their financial management skills. Luckily, this is one area that can be addressed by parents and caregivers. Some of the strategies that can be employed in this regard include:
Make money present
Children can’t learn from what they can’t experience. Most households attempt to ‘protect’ children from the corrupting element of handling cash. This is a wrong approach. From a young age, children need to be exposed to modest amounts of money so that they can learn how to manage it. Of course the amounts exposed to them need to be small, depending on their age, so that they can learn its value without being ‘spoilt’. The best approach to do so is to assign small cash values to some chores and/or having a modest weekly allowance.
Help them see their goals
Every cent that is spent by your child needs to have a purpose. If your child wants the latest video game then you can help them plan on how to save their allowance in order to afford it. In an adult setting, we rarely have all the funds available for the things that we want in our lives. The same should apply to children. For example, as a car owner, you need to plan ahead for the costs involved in ensuring that your vehicle is insured. Once you get car insurance quotes, you adjust your budgetary spending to ensure that you can meet this commitment. This is the skill that you need to impart in your children.
Make choices about how to spend money.
Money management is all about making the right choices. Very few adults have the financial capability to meet all their needs and wants, and your children need to learn how to prioritize. They need to know that if they want to buy their favorite shoes, they can’t have ice cream on a daily basis. It helps if you can give them examples of the choices that you face when making financial decisions and the reasoning behind those choices. Children learn best from good role models, so you need to ensure that you make good decisions when it comes to your spending.
If your kids have an income, encourage them to shop with their earnings
At some point in your child’s life, usually when they are in their teens, they can start earning their own money. This can be through performing odd jobs at home or working part-time at a retail establishment. Once they do so, encourage their financial independence by encouraging them to meet their needs through their income. This will show them that you have to work to have the financial capability to have the things they like. That is the true essence of the value of money.
Include board games that feature financial management during game nights
When it comes to board games involving money management, nothing beats monopoly. It allows your children to understand the decision-making process behind investment and the returns that they can get from it. Other board games that are suitable in this regard include cashflow for kids, thrive time for teens and money bags.
Brought to you by our friends at onesureinsurance.co.uk.