There will always remain a difference in the opinion, regarding the concept of money to be toted to the children or not. Some day’s sheer enthusiasm drives in our kid regarding money and some days they seem perplexed about it. The day my 3-year-old kid, insisted on getting him that toy, to which I responded by saying I didn’t have any money. To my amazement, my son countered it with, “the bank will give you the money”. I realized that it was high time for me to open up and go into details about where and how the money comes to us. At the end of the day, it’s the parents who have to take initiative to teach their kids smart financial habits. Since the age of your kid plays a major part in understanding the concept, one should try to be insinuated and impactful in their communication.
Elementary: Coming up with the Idea of piggy bank is a great way to help them visualize about saving, showing them we need money to buy stuff is a good start to avoid incidents like when my daughter picked her favorite candy from the aisle without our knowledge and started walking towards the door. The security stopped her and informed us, to which we had to make her understand that if she wants something she has to purchase it. Representing good habiting by transacting with actual money instead of plastic (cards) gives them an overview of expense, making them responsible about spending.
Teen: Segregating expenses with right reasoning, meaning showing them the need of choosing wisely before spending. For example, by showing your kid that the money spent on the video game will hinder their plan of buying that pair of shoe which is important, will help them understand budgeting. Your kids need to know that money can only be earned, which can be done by giving them commission based on household chores such as taking the dog for a work, taking out the garbage, cleaning the chimney or mowing the grass. Furthermore, once they start saving enough, the parents should start teaching them the values of sharing. Let them pick, where they want to donate their money will develop the understanding of sharing is caring in your child. Making them morally inclined towards donating will bring the best out of your child.
Adolescent: Opening your kid a bank account will help them understand how the account works along with other facilities such as maintaining minimum account balance, ATM fees. It will also enlighten them about cheques and different transaction procedure such as manual withdrawal and deposit, how the debit card works along with information on overdraft charges on multiple swipes at checkout counters etc. The teen should be introduced about saving the account, credit cards and credit scores before the age of 18 so that they will understand and get familiar with the consequences they might face if they don’t keep their finances in good shape. Understanding the need of investing and saving for retirement will help you kid to secure the future.