Teach children the value of money

It’s never too early, so make sure it’s not too late

Who among us would like to see their children grow up to be financially responsible? Every parent does. We all desire to see our children become financially independent someday in adulthood, able to provide for their own families and secure their future.

“Learning to be financially responsible does not happen overnight. It’s best to start while your children are still young, with something as simple as taking them to a bank to open their own savings account. While math lessons are taught in school, handling money and valuing it well should be taught at home first.

Get started teaching your children the value of money with these tips

* Talk about what money is for. Small kids may think that money grows on trees or come out of the ATM or wallet and is for buying the family’s need, and if there is some more left, for the family’s wants. Tell them that money is earned; parents work so they can earn money. No work,no money. No money,no food and toys.

* Pay for needs first. Since money is hard to earn, families should prioritize paying for their needs first. These include food,clothing,tuition fees, transportation, rent or mortgage, electricity, and the needs may be prioritized and met. As for wants-those that can them,and only buy them if you can afford to.

* Encourage saving.”Children can be taught to save even if they are still young. First, tell them why it is important to save- to have a coin bank where they can put some funds in the future when you need them. Second, give them a coin bank account for them so their savings can grow. For bigger kids,transfer some of their money to higher-yielding investments as savings accounts give only minimal interest.

* Give an allowance. Since people learn more by application than by studying the theory, allow your children to learn money matters the practical way- by giving them an allowance. Kids in the upper preschool years can be given P10 or P20 once a week or so with which they can buy something in school during recess. You can increase the amount in grade school.

The purpose of the allowance is to teach kids that they can use their money in two ways: save or spend. And they will find out that if they save, they will have more money tomorrow. By spending, they will also learn choose items carefully. The more expensive item will use up more of their money, leaving them with less. And if they choose the cheaper item, they will have more money left.

* Model good behavior.” Children look up to you and watch what you do. Practice good money habits yourself by saving, not over spanding, by paying your bills on time, and buying wisely so they can imbibe these habits too. As they grow, they will bring these good money habits with them.