An important part of financial success of any individual or family is to be able to establish a budget and then learn to live within that budget. However, it is not that straightforward and when it comes to children it can become difficult if they have never been taught about money nor the fundamental concept in budgeting and economics which is our needs and our wants.
Needs are something you must have for survival. For example, food and water. Without food, you would not be able to live. Wants are something that you would like to have, but it is not necessary, and you could do without it.
Sometimes needs and wants overlap. For example, cake is a food, but it is not a need, but a want. In general, you need a basic diet to survive, but that diet does not need to include cake.
Teaching your children these valuable lessons is a skill that will be extremely valuable in later life.
Below are some fun ideas to teach your kids about money.
- Pay for some items in cash
This may seem a little strange but as most transactions are completed online and a lot of purchases are made using debit or credit cards some children have never seen cash! So, let them see money so they get a sense of income and expenditure. Also, explain to them how debit cards and credit cards work.
- Give them a budget
Setting a budge together for your child will help them overall. Give them pocket money and work together writing down the amount and what they spend it on. This simple tracking money will be so valuable as they grow older and earn their own salary.
- Teach them how to earn money
Ask your children to do tasks around the house and let them ‘earn’ their own money. Also, teach them about selling unwanted toys or books on EBay or at a car boot sale.
- Making saving money fun
Buy your child a piggy bank and encourage them to save their pennies – let them see how quickly putting money away can add up. Why not make up a savings chart so they can see the amount of savings grow!
- Talk about money
It is very important to talk to your children about money, discuss needs and wants as well as the basics of how people earn money and what types of things you pay for in terms of your monthly bills.
- It’s not all about money
If you are anything like me, you love spending time with your family and sometimes that means going for a walk on the beach or taking photos together or watching a favourite TV programme. Teach your children that it is not all about money – that doing things together as a family is priceless!
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