Parents always want their children to value money and understand the value of a dollar. But how do you teach your kids about value when they are so young?
Teaching them from an early age is a great way to start, but there are other ways to teach them about value later in life.
In this article, we will discuss 10 steps that will help teach your kids the value of money.
Explain the value of money to your kids and how it's earned
The value of money is always changing.
For that reason, it's important for kids to understand this concept so they can learn how much something costs and what it will become in the future.
This is a great way to teach them about how they can do something or work for things themselves and earn money instead of just asking someone else like their parents.
Use toys or games as teaching tools.
If you have some old toys or games lying around the house, use those as an example when talking with your kids about value.
You could tell your child about how they cost a certain value, and what you did to earn the money for it (i.e., saving up £50) or give them some chores around the house that will eventually lead them to earn enough money for whatever toy they want.
If your kids have been begging for something (i.e., an cool quad) for a while, then this is the perfect opportunity to teach them about value by making them work their way up to it.
Let your kids know what they CAN'T have if they keep demanding things all the time.
If you're constantly giving in and buying things from your children on demand, then they'll learn nothing about value.
They will also have the expectation that whatever they want is a given, which can lead to them being spoiled or unhappy later on in life.
Show them the cost of living in their own homes, such as bill payments
If you're up for it, you could show them some of your bills, such as your phone bill, TV service provider, or electric/gas utility.
Have them learn about how much these things cost and why you pay for them in the first place.
Showing them your bills keeps things real and will be something they can relate to.
This will also help them value these things more because they're not just given to them.
If you have a credit card, show your kids the monthly statement and how much interest is being charged for carrying an unpaid balance from month to month.
Teach them about budgeting
This is also a good time to talk about budgeting, and why it's important to think about what you're spending your money on.
Talk about the value of money and how it can grow if you save up for something.
If they're old enough, have them create a budget with you to see where their money is going each month.
This way, they'll be able to track their spending habits as well!
Have a monthly allowance for chores around the house
This is so they can learn the responsibility of taking care of their things. If they break something, it's on them to fix it or replace the item.
When you create a weekly list of chores for your kids, make sure to include an allowance that can be used however they want- whether it be saved up like money in a savings account or spent on toys and games.
Help Them Set Up Their Own Savings Account
Kids should have their own savings account, so they can learn the value of having a place to put money.
This is one way you can teach them about budgeting and saving for things in life that are not going to be cheap at the time- like college tuition or maybe even buying their first car.
What are the advantages?
- Kids can learn the value of budgeting and save for future purchases.
- They will learn the value of saving for something and not just spending everything they have in their pockets on impulse purchases.
- It is one way you can teach them about budgeting with a fixed amount each week or month so that when it comes time to buy something big like car insurance or a new bike, they will have their savings account to draw from.
- It's a great way to teach them about how money works in society.
- They learn the value of having a place to put money that isn't under the mattress.
- College tuition or maybe even buying their first car.
Set goals together with your child
This will create a sense of accomplishment and motivate them to keep going even after obstacles arise.
This can be as easy as setting up a goal in the form of an allowance.
If they want to spend it all on one thing, then that's their choice and you don't have to offer them anything else after that purchase (unless it's something important). This will teach them value for money.
If they do not use their money to buy something, they can save up for a larger goal.
This could be that new bike or skateboard they've been asking for all year!
Encourage them to donate their unused items to charity or sell them on eBay
By teaching your kids to donate to charity, you are teaching them to value the worth of what they have and not cling to things for too long.
It's a good idea to teach your kids about eBay as well, this may spark an entrepreneurial spirit, or a desire to have their own business in the future.
Teach Them About Investing
Teaching your kids about investing can help them value their money and learn how to grow it.
This will show them that they don't need to spend all of their savings on the newest toys, but rather save for what's important in life; like college or retirement.
Depending on their age, you can even teach them about the stock market. If you're not an expert in investing, there are plenty of books and online tutorials that can help you out.
Teach Them To Shop on a Budget
Some people don't value their money because they are spending it frivolously.
The key to teaching your kids the value of money is showing them how much easier life would be if you didn't go out and spend all of your earnings on a fancy dinner or expensive clothes.
You can teach this by taking time to go through receipts with them, and showing them where you would have been able to spend more money if it weren't for all of the unnecessary expenses that pile up over time.
Have a Money Jar
You would be surprised just how much money you can amass over time if you start saving up as soon as possible.
You can teach this value by having a money jar in the kitchen where your kids will see it every day and be reminded to save their change from pocket money or allowance for bigger purchases they might want later on.
A good way to get started is just with one jar, but don't underestimate the value of having multiple jars or even a box at different locations.
This is an especially effective strategy if you have children who are old enough for a little independence and can go out to buy some things on their own.
Wrapping Up
Your kids need to know the value of money and how it's earned.
Teach them by teaching your own children about their earnings, such as allowance or working in a family business.
Keep an eye on what they buy with their allowance so that you can help guide their purchases towards more valuable items.
Show them the cost of living in their own homes, such as bill payments by showing where all that hard-earned income goes when you're paying rent for housing and utilities like gas, water, electricity, etc., which will give them a greater appreciation for just how much money is needed each month.
The best way to teach your kids the importance of saving money is by setting up savings accounts for them if they don't already have one set up at school or through a bank.
We hope these tips have helped you get started on this process with your children or that it's given you food for thought.
Let us know if there are any other points we can help support you with as a parent!