Parents are the best guides and mentors when it comes to teaching safety and good manners to their children but when it comes to money they don’t know where to start with. Parents’ behaviour is the biggest influence when it comes to spending money. It is because the talk about money rarely happens at home. Being able to manage money effectively and making sensible decisions concerning it do not just happen as no effort is put to discuss such an important aspect.
Here are a few ways to teach students value for money.
Start Young—-The best way to start teaching children about money is as soon as they are able to count. You can also try to make money the topic of regular family discussions. This should be done particularly when the children are due to receive cash, may be pocket money or some scholarship so that they can talk about saving versus spending.
Learning through play—With young children, the simplest and most direct route to learning is through play. Beyond play-based learning it can be helpful to structure some of the financial learning by using games and aids. There are some excellent board games which teach kids value of money.
Understanding difference between need and want—The child should be made to understand the variance between needs and wants. This will help them make sensible spending decisions from a very young age .Parents should reinforce through words and action that it’s important not to spend more money than they have. Parents also should not yield to all the demands of the child.
Providing experience of choices with money—It is important to include children in some financial decisions at a later stage. They can also be given some money in market or a mall to buy something of their choice so as to give them the experience of their selections with money. The concept of compound interest can be introduced so that the child could comprehend the significance of saving money.
Let children experience consequences—When kids have their own money, it is vital that they make choices and deal with the consequences of their actions. By experiencing negative consequences first hand, they will learn to make smarter financial decisions. They can also be given routine tasks and household chores to handle money.
Thus the child should be shown by the gestures that money can play a variety of roles in their daily living, whether it is spending today or saving for tomorrow and in this context, pocket money is a good way to teach short and long term saving as well as spending habits.