5 Things you Must Teach your Child about Money
For a lot of parents, teaching their kids good money habits is probably something they at least think about. I know I’m worrying about it. And today we have guest blogger Kyle Kam with some tips on how to do it.
Every parent should realize the importance of teaching kids about money while they are young. By doing so, parents can help their offspring establish good financial habits they can find useful later in life. This could be quite a challenge, but knowing the benefits it could bring in the future is very much worth the effort, plus the fact that parents can also learn and be more responsible in the process.
1. The Real Essence of Saving
According to a study conducted by PruLife UK, Filipino children know how to save money, which is a good start. This shows that parents do teach them, but they do it typically to buy what they want, such as a gadget or trendy clothes, shoes, etc. Buying “big items” is a motivation parents use to easily get their child to save. However, parents will have to improve on this, and teach children to save for the “rainy days” and not just to buy an expensive item. Perhaps as a parent, you can share the ant story about preparing for the rainy day, or be a good example on saving money yourself, showing your kids that for every money you earn, you practice keeping a portion of it for savings instead of spending everything.
2. Smart Spending means Living Within your Means
As parents, we should be the best examples of good spending habits. Whenever you shop for groceries, why not ask your child to join you and get them involved in the task by helping you create a grocery list. This will teach them to prioritize needs from wants. Items that are more important should be prioritized, and proper spending does not mean getting everything you find attractive in the store. Be the best example by living within your means, and not desiring trendy or trivial things you don’t really need. This is an important lesson not just for its financial aspect, but in building a good foundation for your child to live a simpler life and to appreciate what they have. This can also reduce waste in your home, since you can cut off on buying unnecessary things. Be a good example of contentment for your children.
3. Money Earned Comes from Hard Work
Children will value money more once they know it comes from hard work. Tell them that whenever they don’t see dad or mom at home, he or she is working to earn money they spend to buy food, clothes, toys and other necessities for the home. Children of OFW parents need to know that their parents sacrifice not being with them just to earn money and give them a comfortable life. During summer, make an opportunity to teach them the value of hard work by selling items such as ice candy or cold drinks just in front of the house. Make sure to save the earnings.
4. Budgeting Habits at an Early Age
If your child already goes to school, you can prepare snacks for them to eat and try giving them a small amount of cash allowance. Depending on their age, you can also try giving this on a weekly basis. Teach them to manage their allowance by allotting a portion for school items they would need, transportation expense if they are big enough to commute, and pocket money for emergency. If they are still small and a small daily allowance is more practical, they can practice self-control to only spend the money for what is needed, since they bring their own snack. The excess allowance can then be save ind their piggy bank.
5. Value of Sharing
Filipinos are taught by their parents to learn to share their blessings. As a Christian nation, we are taught by the Bible to allot a portion of our income for the church or other Godly service. This will even give us more blessings. The value of sharing is what also makes us bounce back easily after a tragedy, since we help one another by giving what we can, maybe in the form of goods or cash. Teach your children that money is not all about them buying what they want, but also helping the needy.
Good financial habits are learned early on in life. Be a good parent and prepare your children’s future by instilling in them good saving, spending and sharing habits.
Kyle Kam is an online marketing specialist for Moneymax.ph, the Philippines’ leading financial comparison website. Whenever he’s not working, he’s busy at home watching MMA videos the whole day. You may follow him on Twitter @undisputedkyle