Many people say that they can afford to buy the most sophisticated TV or smartphone; no, you can’t if you don’t have the total amount to buy. It will allow him to go through the path of trial and error earlier and understand how to act in the future. He will learn to plan expenses, save money, independently make financial decisions, and value his time and resources. Let his first financial goal be a toy – but he will buy it himself and understand how to move towards his goal. Children are more vulnerable to scammers. Without preparation, the child will not recognize deception because he does not yet understand the risks and trusts everyone.
Check with a friend by phone or at a meeting whether he asks for money, look at the phone balance – whether there was a transfer. It is better to discuss with the child what methods of fraud he may encounter and how to act in such situations. For example, hackers have hacked into a friend’s page on a social network and will be asked to transfer money on his behalf. Or an SMS message was received stating that they allegedly made a transfer to the wrong phone number by mistake and asked to return this amount. It is necessary to explain to the child that such messages need to be checked. Better yet, ask your parents for help.
Explain In a Playful Way
The best way to introduce children to money is through games and experiments. Offer the child a game: imagine that you have found a treasure. How do you know if it’s real money or fake money? You can use actual bills and money from Monopoly. Investigate how to distinguish a genuine bill. Tell your child about the signs of the authenticity of banknotes, show pictures of watermarks, how letters and numbers shimmer, and where other security features are hidden. You can gather friends and hold a competition: who will find the most animals and plants on the banknote using a magnifying glass.
Explain to your child that money does not grow on trees and does not take from the box (ATM), as many kids believe. The child must understand that money does not appear by itself at the first request. Tell us what professions are and why they are paid differently. You can arrange a game, for example, in a profession. Children can choose their role: hairdresser, doctor, baker. Give everyone a set of toy money so they can ask each other for favors and pay for them. Please start with the elementary: we receive products and vital services in exchange for money. For example, if you don’t buy milk, you won’t have anything to eat muesli in the morning, and if you don’t pay for electricity, the house will be dark and cold. Playshop: put a price on different products. Someone will be a seller; someone will be a buyer. The main thing is to convey to the child that things do not get just like that; you need to pay for them first.
Time to Learn to Plan Properly
You can teach planning on the example of a family budget. The child must understand that the costs are divided into:
- Obligatory Predicted Payments: utilities, transport costs, and sometimes – loan payments.
- Necessary purchases: food, clothes, medicines
- Optional Payments: entertainment, travel, buying toys, etc.
First, you should subtract the mandatory projected payments from the budget and calculate the approximate number of necessary purchases. And only then decide what the remaining amount will go to. This approach will help the child to understand the difference between what I want and what I can and teach them to make the right choice. Help your child plan purchases properly – teach him to make a list of necessary products before going to the store. Tell them that products in the same category prices may differ due to composition, volume/weight, brand value, etc. Teach your child to use resources rationally: explain how to use water and electricity economically and why it is not always worth buying what is cheaper – a better thing will last longer.
Finally, explain that a dream is a goal, and a plan is needed to achieve it. If the child correctly prioritizes purchases and saves some pocket money, he will be able to save up for the desired thing. Please encourage your child to regularly keep a diary of expenses to be easier for him to understand what he spends his money on. Some banks issue children’s cards to which you can transfer pocket money. It is very convenient as parents can track their usage. Explain to your child how to protect yourself from scammers – do not give bank card details to anyone, cover the ATM keyboard with your palm while entering a pin code, etc.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.