Teaching Money Management at an Early Age
Money management is not part of a school or college curriculum. Hence, most children have no concept of money management. The onus of teaching children about money management lies with parents. It is never too early to start teaching your kids about saving. You can begin teaching them about money management when they reach the age of 5 or 6. Most children have no knowledge about money management, saving or investing, and that is why when they become financially independent, they end up making unnecessary purchases which can result in financial instability and debts. Imparting the right knowledge will prove to be beneficial when your kids grow up and the savings that they have can be put to good use, such as higher education or even a medical emergency.
Encourage Your Kids to Get After School Jobs
While you can give your children an allowance, you should encourage them to start after-school jobs. Paper-routes, lawn-mowing and babysitting are some of the jobs your kids can do. When they get paid for these jobs, talk to your children about saving the money. You can open up a bank account for them or even an investment account that will help compound their money. They can use a part of the money to buy things they need and the remaining can be saved. This will inculcate the habit of saving money and help them understand the value of money.
Reward Your Kids
Each time your children save or invest money, you can show your appreciation by rewarding them with a treat or something they like. Praise your children, so that they get motivated to save even in the future.
By helping your children help themselves, you will not only teach them about the importance of saving money and money management, you will also reinforce your knowledge about finances, savings and investment.