As such, as a savvy parent, you should use this power to inculcate money shrewdness in your kids. Below are six effective ways to do just that.
1. Simulate a market environment at home
Create a market environment at home that mimics a real world market. Besides basic allowances, provide different ways for your kids to make money. For instance, you can pay ten cents for every 5 weeds plucked in the backyard, or for tidying the house, helping with chores, keeping their rooms clean, etc.
This way, your kids will learn to make as well as to value money. Also, institute fines for playing truant, misbehaving, coming home late, etc., to strike a balance.
2. Incentivize money accountability
Insist on accountability for all money given to sharpen your children’s planning skills. Go a step further and incentivize accountability by offering bonuses for detailed expense records. Above all, practice what you preach since kids learn more through observation.
3. Involve the kids in money decisions
When it comes to overall budgeting and other family money-related deliberations, involve the children so that they can learn how budgeting and money works at advanced levels. Furthermore, they will know that there is no exemption from prudent money use at any stage in life.
4. Inspire the desire to make money
When one of your children wants something, inspire the inclination for making money by proposing that if he/she makes a certain amount, you will top it up and purchase the desired item.
Also, you can act as a bank by offering interest for money saved with you to simulate how money can work on your kids’ behalf.
5. Share educational money stories
Share stories that implicitly convey the benefits of astute money use. Do not shy away from tweaking popular tales to teach important money lessons. Using extended family members as characters is advised to give the stories a personal touch – like a story about your great grandfather, or his uncle for instance.
6. Cultivate a saving culture and transition into actual investments
Open up savings accounts for your kids and offer to match half or full any amount saved. This way, you will promote a saving culture. Also, as time goes by, get your kids into real life investment by guiding them in putting down money on company stocks they fancy. You can boost their stakes using the “match saved amount” tactic repeatedly.
Do not procrastinate – start implementing the above strategies right now to give your kids sound money knowledge and a sure financial footing. Share with couples, friends, and aspiring parents on social media to help nurture a money-smart generation.
Sources:
http://www.parenting.com/family-time/money/5-tips-raising-money-smart-kids
http://www.bankrate.com/finance/personal-finance/raising-money-smart-kids-1.aspx
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Last update on 2025-10-22 / Affiliate links / Images from Amazon Product Advertising API
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