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How to Teach your Child the Value of Money

Written By: admin on April 3, 2009 3 Comments

Our relationship with money is one of the most important relationships in our life, whether we like it or not. Therefore, as a parent you are obliged to learn your child how to be successful in managing finances and you will enable him to have a happier life, in which we control the money instead of letting money (whether it is due to lack or excess of it) control us.
1. Never tell your child that you can’t afford something
If you say that all the time, your child will learn that you are not in control over your money, but that money controls you. It is important that you show your child that you have the last word in the spending of money, so instead of “We can’t afford it” say “We choose to buy this toy next month, because we haven’t planned for it this month.”
2. Learn your child how to spend money
Money management is not only saving, it is also spending. If you spend too much money and run a huge debt, you will be forced to save. Savings begin in the store and the manner of spending defines your finances. In order to learn how to spend money, your child can receive small weekly allowances in order to develop sense of money.
3. Planning in diapers
When you begin to give money to your child, make sure that you give some directions how to manage it. For instance, you can make a rule that 60% of money has to be saved, and 40% is free to be spent on candies and toys. Don’t worry if at first your child doesn’t understand saving and spending concepts. Similar to learning how to walk, this will also take time. Useful habits are acquired over period of time and it is important that your child learns that this is a good habit and associate it with positive feelings.
4. Use cash
Children don’t understand what you’re doing when you’re paying and if you use credit cards a lot, your child might get the impression that the magic plastic can buy all the toys in the world. Therefore it is important that the child sees and feels the money so that it can comprehend that money is exchanged for products and services. Try to pay in cash as often as practicable, and show banknotes and coins to your child. Of course, you must also learn them what are credit and debit cards.
5. Show them by your example
Learning is copying others, and you have to show your child that you manage your money. Show what is budgeting, show how you record expenses, because your child will learn by example.
6. How much does it cost?
Child has to learn how much something costs, in order to understand why something that costs 1 dollar can be bough immediately, but we have to save for the Barbie doll.

3 Responses to “How to Teach your Child the Value of Money”

  1. vinay says on: 8 April 2009 at 1:49 pm

    very useful

  2. nalawde mahesh says on: 4 September 2009 at 9:01 am

    VERY GOOD TIPS TO EDUCATE YOUR CHILD AT AN EARLY AGE

    FANTASTIC………….

  3. Mohan Kumar says on: 22 September 2009 at 7:56 am

    Please publish some more tips.

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