If you have children, you know just how expensive they can be. Aside from the essentials like food and clothing, there’s school-related expenses to worry about, then maybe other activities like piano lessons. After all those items that are deemed necessary for children, you have unnecessary expenses like toys. You may look back to your childless days and wonder, how on earth did I complain about spending money before I had kids? If you worry that you are spending too much on your kids, that they do not understand the value of money, here are four tips for teaching them the basics of financial responsibility.
Take them with you shopping
You may be thinking, are you kidding? Many parents find it difficult to take their children to the grocery store or the mall without their kids begging, crying, or throwing tantrums whenever they see something they want and can’t have. At the same time, once kids are older than four or five, it is important for them to learn that the world is full of things, and they will be exposed to products constantly, and throughout their lives. Notwithstanding, learning early on that, as the song goes, “you can’t always get what you want” is better than finding out this harsh truth when you are an adult.
Demonstrate the value of something using coins
Young children usually aren’t able to assess the value of something based on a number you may tell them. For example, if you say that a toy that they desperately want costs $20, and you show them a bill, they may not grasp this value. On the other hand, once they see $20 in coins, they begin to understand that certain items cost way more than others. Once they understand that everyone has limited financial resources, they will be less insistent on buying things they don’t need.
Never impulse buy for your children
Although you may occasionally impulse buy for yourself, you should never, ever impulse buy for your children. Why? Because unlike you, children have not yet developed the faculty that enables them to control impulse. As such, once they see you buy something on a whim, they think that this can happen any time they want it to happen. Instead, use toys as rewards for patience or good behavior.
Teach and reward them for saving money
Although this may be a bit old fashioned, using a piggybank to teach children the fundamentals of saving is a remarkably effective way to get them interested in saving money. One method that I’ve employed is giving them a set amount of money every week. Tell them that if they save a certain amount in 4 months, you will double that money for them. This is a great motivator to get your children to save and wait for long-term rewards.
It goes without saying that in a consumerism-driven culture, it will be doubly difficult for children to value something other than that which can be bought. Still, if you make it a point to teach them and reinforce financial lessons early, you will be teaching your children one of the most important lessons they will ever learn.