Great Strategies For Teaching Children About Money

Teaching children about money is simple to do when you use day to day life experiences to discuss the values and applications surrounding cash. Kids are quite receptive to what goes on around them. When you are consciously working to structure their understanding of money, how it works and its importance, you can instill the basis of wise spending decisions and habits.

It is imperative that you work to communicate your values concerning finances to your children. At each of the developmental stages of life you will find that there are newer and more in depth discussions that you can have to this regard. If you are vague and non-communicative about your saving and spending choices, kids fail to develop the proper levels of understanding.

Most parents are quick to tell their children that they will not spend money on a certain item such as a video game or expensive pair of shoes. It is rare however, for parents to give in depth explanations of why. Taking the time to put a particular dollar amount into perspective helps kids see the difference between wants and needs and how purchasing too many wants can conflict with the ability to provide for needs.

If the shoes or video game that your child wants costs approximately $75 you can try putting this into terms that your child is able to comprehend easily. Rather than telling the child that the item is too expensive, make comparisons between the item of want, and the number of needs that a particular dollar amount can fill. Tell the child that at this price you can purchase so many groceries, so much pet food and bring home so much toilet paper and paper towels. This will help the child to understand that the wants will come at the cost of the necessary items that must be brought home in order to make the household flow normally.

On some occasions you kids may become resentful regarding your purchase decisions. This is often because you have failed to put spending and saving into terms that they can understanding. No parent is obligated to justify or explain a spending choice as it pertains to high-priced, unnecessary items, but there remains a real responsibility to create financial understanding and this is often the perfect opportunity to do so. This is also a great time to teach your child to save for costly items, so that they develop realistic expectations of how wants and wishes work in the real world.

In the process of teaching children about money, ask your youngster to start keeping a journal that records their thoughts and opinions regarding finances and the different monetary goals that they set. You will find that as your instruction deepens, the goal setting of your child will also change to reflect better values and a deeper understanding of how finances work. By instilling knowledge and good values early on, you can help pave the path towards comfort and success for your offspring.