It is never too early or too late to start a young person in daily financial concepts. And, by the way, you do not have to be a financial expert. Here are the tips to help parents, guardians, and caregivers teach a child (from preschool to college) why and how to be responsible with the money.
Have regular conversations about money issues
That includes talking to your child about what he is doing and why when managing money at home, in the city, or at the bank. For example, consider talking about similar products that have a noticeable price difference in a store and how you decide what a good price is. In addition, you can explain that having a savings account in a bank has advantages such as interest income, peace of mind knowing that the money will be there when you need it and that the deposit insurance coverage covers up to $250,000 if the bank closes.
Even with automatic transfers, such as direct deposit of your salary, consider the bank statement to show how the money goes in and out of your account.
Also, there are opportunities to explain financial decisions at special times of the year (such as at the time of the tax return or the “season” to choose insurance at work).
Consider giving a pension as a teaching tool
It can be a positive way to teach children about money management, even to preschoolers. But before giving them the first pension, help your child decide how much to spend now and how much to save for future goals. Then, help the young person to see if that goal is being achieved by consulting a bank summary online or on paper. Also, talk about the advantages and disadvantages associated with a purchase decision, such as buying a toy can mean giving up the opportunity to buy another item that the child also wants.
Think about it before giving the child more money if he spent it before paying the next pension. That is because part of the purpose of a pension is to teach saving skills, self-control, and the benefits of waiting to enjoy the greater reward.
Help your children develop a healthy skepticism about unsolicited advertisements and surveys
In general, teach your children how to analyze ads; They need to know that “special offers” often are not as wonderful as they appear.
Earnings and savings since the beginning
Children in this school group are naturally curious about their world, including money. By introducing several basic concepts and being a good role model, you can help them gain financial skills that can last a lifetime.
Learn about how you earn and how money is used!
Money can be introduced to children as soon as they learn to count. Although you usually pay with a debit card, occasionally use bills and coins so that your child can learn about the different values. Imaginary games, like pretending to go to the store or restaurant, can also help teach money concepts. Playing with real coins has many advantages because you can teach children the values of different coins but remember that coins are a choking hazard for young children.
Learn about how money is earned
Having the child get paid for small tasks will allow him to learn about the value of working and earning. Consider making a poster of your child’s work and include the amount of the payment for homework done.
Consider separating the money to spend from saving. Start with jars or piggy banks clearly labeled for your child to divide their cash. This will teach your child to synchronize their expenses and savings.
Understand the differences between needs and wants
For your child to make good spending decisions, you must be able to identify and distinguish between needs (things needed to live, such as food or shelter) and wants (toys and sweets). You can play to point out different items in your home and ask your child if it is a need or a wish … and why. You can do the same when shopping.
Children generally do not understand the difference between buying and borrowing. You must teach them to be responsible for the items they borrow and return them promptly. Help your child create and maintain a list of items he has borrowed from friends or relatives and return dates. You will support the concepts of responsibly borrowing and personal accountability by doing so.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.