“Children are never too youthful, making it impossible to begin learning money lessons. The more open doors they need to work with money and oversee it, the more money keen they will be as grown-ups. Turn your day-to-day activities into learning experiences. Trips to the bank, store, or the ATM machine, for instance, can be a perfect opening for a discussion about your values and how you use money. Read on for some fun, simple ways to introduce finance to your child.”
Financial literacy is one of the most important subjects for a child to learn and carry with them into adulthood, and yet, it is one of the least taught subjects. Kids often learn their money lessons from television, their friends and all of the fractured and unconnected snippets they pick up from their parents. As a parent, you can help your kids start their financial life on the right foot without spending hours every day lecturing them.
Here are five ways to help your children along a fiscally responsible road:
Play the Grocery Game
There are many versions of the “grocery game,” and you can even come up with one that is all your own. You can give your children a fixed amount of money and challenge them to purchase as much food as they can with it at the grocery store. For example, you can give them $5 each and a list of food that your local food bank needs. Your kids will have to put their comparative shopping skills to the test to be able to purchase as much food as they can with the limited amount of money. Another way to teach them to shop is to give them your grocery list and have them work out how much everything will cost and identify places where you could save money by buying alternate items.
Let Them Adopt a Budget Line Item
Older children who understand the concept of a family budget can start being responsible for a portion of it. Begin by giving your children a single budget category for a month and let them manage it. Choose an expense type that is discretionary – meaning that you can control how much or how little to spend. Common discretionary budget lines include groceries, entertainment and vacations. Kids can research online to find the best prices and to allocate the budget in the most effective way. Even if they make mistakes during the month, it will have little impact on your overall finances and they will learn a valuable lesson.