How to Teach the Value of Money to your Kids!

Value of money

Children are becoming smarter day-by-day. With 3-year olds operating smartphones like an adult, we know for sure that the younger generation is going to be faster and probably smarter. Kids have access to internet at a young age and hence they have a good grasp about how everything works in the world. Parents have also started giving pocket money to children at a young age, this situation creates a need to make sure that our kids know the value of our hard-earned money.

The value of money can be taught to kids in many fun ways and it doesn’t necessarily have to be a boring financial lecture. You can try out the following strategies to develop cognitive skills necessary to understand basic monetary concepts.

  1. Take your kid to the bank

On your next visit to the ATM or to the bank make sure that you take your kid along. Getting your kid involved in all the bank related activities to make them understand the value of money.

Make them understand that money is limited and whatever you have is in the bank. As your child gets older, it would be wise to open an account for them so that they learn to track their own savings.

  1. Give small allowances

You can choose to give small allowances to your child weekly or monthly so that he/she can buy small items for that money. If you go out shopping, tell them to use their money, so that they learn the concept of buying. If they finish the amount and still want something more, let them know that they’ll get extra money next week. Don’t give in. Be firm.

If your kid asks for a big item, teach them how to save their weekly allowances so that they can buy the big item in a few weeks. This will teach them the idea of saving.

  1. Let your child go to the grocery store

It is necessary for you to teach your child to go to the stores and buy stuff independently. Being alone will instil a sense of responsibility in them and will teach them to deal with strangers. They will learn to count cash and to take the change back. At first you can be with them but observe from a distance while they do the whole transaction, but after a few times it would be wise to let them go alone.

  1. Shop at a vegetable market

Instead of going to a supermarket to get your vegetables, take your kid to the vegetable market. Not only will your child learn the connection between work and money, but he/she will learn to choose the good vegetables from the pile. They will learn to see the market economy in action and will be able to relate between seller and buyer.

  1. Play Monopoly

Games like Monopoly and Game of Life are interesting ways of teaching your child about earnings and savings using fake cash. They will not only enjoy the whole board game activity, but will learn to deal with money.

  1. Give your kid a chance to earn money

To learn the real value of money your kid needs to earn some money based on his/her hard work. This will show them that earning money is difficult and one should spend it wisely. You can give money to your kid if they clean their room or the garage. You can also tell them to clean the car or trim the bushes to earn some extra pocket money. Assign some small things and hand out some cash if they do end up completing the task well. Reward them if they do the task well. This will ensure that your kid will be interested in this whole activity and will do the task with his/her whole heart.

Teaching kids the importance and value of money is quite important as many teenagers are known to recklessly spend their parents’ hard-earned money.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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