Bangalore: Children learn the complexities of science and mathematics in their early years of school. But they do not study finance, a subject they would use all their lives. When you ask a kid where money comes from, reply would be "Dad and Mom". In these times when we are hit with the global economic crisis, it is benefiting to educate your children more than ever what to do with money they have received. How do they save properly? What about budgeting or managing their finances? Teach your children the difference between needs and want.
Here are a few essential concepts you can use to teach children now that will help them make smarter financial choices as they grow up:
Have a Goal
Find out what your kid desires the most. It could be to have a new bicycle or an iPod. Teach your kid how this goal can be achieved by saving money. They need to plan on how they can reach this goal at the earliest. The kids should be taught to prioritize their needs. Once this is clear, their saving habits improve.
Saving Plan
The first lesson in finance for kids is that money is a limited resource. To begin with this plan you can gift a piggy bank to your child. Make sure your child contributes some amount to savings each week. If your kid is a little grown up you can open a saving account in the bank. Encourage your child to set short and long term goals. Create a graph or a chart that shows how much they have been saving on a weekly basis. When your kid sees the amount building, he will be motivated to save more.
Stick to the Budget
Budgeting for kids is essentially being able to allocate their pocket money or allowance to different areas such as saving, food, entertainment and clothes for example. Budgeting is a good way for teaching money to children. Good money habits are developed when kids can budget properly.
Do not Borrow
Kids should know that debt is a terrifying part of one's financial life. Lending money from friends to buy chocolates or a drink is a bad habit. They should be thought manage with the amount that is been given to them. Teach your kids to ensure they pay back the. In this way they learn how to pay their credit bills on time, and to borrow money that could put them in debt. You could also show your kids your credit card bills and how to pay them off on time to demonstrate how the cost of an item goes up because of the interest charged. Children should know how the bad habit of paying late can put you in a deep financial hole.
Work Leads to Reward
Teaching the kids about the connection between work and the obtainment of goods and services does more good than just buying them a new toy. They will come to understand that it takes effort to make money. They'll also gain perspective on the value of planning and goal setting. When it comes to giving pocket money for your kid, allot certain task to them. Only on completing the task they will receive their pocket money. The tasks could be simple, to help you with some household work, or getting good grades at school.
Giving Back is The Best Gift
At a young age, your kids can donate clothes and toys to charity organizations. Donating to charities, including volunteering in your community, is a really important value for children to learn.
Here are a few essential concepts you can use to teach children now that will help them make smarter financial choices as they grow up:
Have a Goal
Saving Plan
The first lesson in finance for kids is that money is a limited resource. To begin with this plan you can gift a piggy bank to your child. Make sure your child contributes some amount to savings each week. If your kid is a little grown up you can open a saving account in the bank. Encourage your child to set short and long term goals. Create a graph or a chart that shows how much they have been saving on a weekly basis. When your kid sees the amount building, he will be motivated to save more.
Stick to the Budget
Do not Borrow
Kids should know that debt is a terrifying part of one's financial life. Lending money from friends to buy chocolates or a drink is a bad habit. They should be thought manage with the amount that is been given to them. Teach your kids to ensure they pay back the. In this way they learn how to pay their credit bills on time, and to borrow money that could put them in debt. You could also show your kids your credit card bills and how to pay them off on time to demonstrate how the cost of an item goes up because of the interest charged. Children should know how the bad habit of paying late can put you in a deep financial hole.
Work Leads to Reward
Teaching the kids about the connection between work and the obtainment of goods and services does more good than just buying them a new toy. They will come to understand that it takes effort to make money. They'll also gain perspective on the value of planning and goal setting. When it comes to giving pocket money for your kid, allot certain task to them. Only on completing the task they will receive their pocket money. The tasks could be simple, to help you with some household work, or getting good grades at school.
Giving Back is The Best Gift
At a young age, your kids can donate clothes and toys to charity organizations. Donating to charities, including volunteering in your community, is a really important value for children to learn.
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