Teaching children about money
As adults, we know the importance and value of money. Money and income influence where we live, what we eat, and every aspect of the lifestyles we lead. To children, money seems to grow on trees as they have a vague understanding of how parents buy food, clothing, and toys. Parents hold the weight of teaching their children the value of money. Whether you're teaching young children about money basics and saving vs. spending or talking to young adults about credit cards and mortgages, there is no better time than the present to teach your child about money. This blog explores 3 important concepts to teach children the value of money.
1. Start with the basics
Your child may notice you at the store and see the exchange of money at the cashier. It is important to take advantage of these teachable moments and start explaining to children how you use money to purchase items such as food, toys, and clothes. A simple way to teach your child about the basics of money is practising going over coins and notes, and having them do simple maths and calculations. Presenting your child with one of each coin and note is a great first step towards basic financial literacy. Learning to recognise the value of each coin and note provides your child with the foundation needed to understand how to manage money.
2. Create opportunities to earn and spend
Children can learn how to make decisions about using money by having money of their own. Providing them with opportunities to earn allowances, such as pocket money, through chores and extra jobs around the house is a practical and useful way to demonstrate how money is earned. Some children are keen savers while others may need a little more encouragement, but the key message we want to get across is that money is earned and not received. Rewarding children with pocket money after completing chores will teach them the value of money and how it is earned.
3. Instil the habit of saving
Children’s early exposure and interaction with money will likely involve spending, which is why it is crucial to teach them that money isn’t just for spending, but also for saving. Help your child get into the habit of saving by providing them with a piggy bank or savings jar, where they can deposit coins and notes. On the other hand, if they’re at an age where they are responsible enough to manage money, you may consider setting up a bank account in their name. Learning to save money isn’t just an essential habit to instil in children, but it also teaches goal setting, maturity, and independence. An effective way to teach children how to save is to encourage them to save for short-term goals, which could be a toy they really want. As they grow older, they begin to understand the value of delayed gratification, and therefore save for bigger and longer-term goals, such as funding their university education or buying their first car!
Money is an essential part of life and provides many teachable moments for our children. Educating children about money from an early age will set them up for life and help them successfully manage and spend their money wisely as they grow older. The fundamentals begin with confidence in maths and English. At NumberWorks’nWords, we offer after-school tutoring to help young learners enhance their proficiency in numeracy, literacy and beyond. If you would like to learn more about tutoring with us, get in touch with your local centre, or book a free assessment today!