Do you want your kid to learn how to value money?
It is important that at a very young age, we teach our children the value of handling money. The moment they knew how to spend, is the right time we teach them this Four Essential Money Skills.
“Children are like soft clay when you are doing pottery. You can mold the pot into any shape or form you want, when the the clay is soft and wet. You have to apply sustain pressure over time and you can shape the pot the way you want. Once the clay is hard or baked in an oven, it is almost impossible to change its shape.”
Our Children should learn how to save money before they learn how to spend. Especially, when they want to buy something like a toy or a gadget. Once they receive their allowance we need to teach them that they should not spend 100% of it, but instead keep 20% of their allowance for their savings so once they reach the amount of the toy they want to buy they will be able to buy it by their own money. They may follow this formula.
Formula: INCOME (100%) – SAVINGS (20%) = SPEND (80%)
2. Spending Skills
The easiest way to teach our child how to control their spending is to teach them the difference of Wants and Needs. “Needs” are the things that we rely on to live (comfortably). “Wants” are not essential to our life, health, or hygiene; they are just things we would like to have. Illustrate to them what are the things they need, and what are the things they want.
And since they only have 80% of their allowance, they should also learn to live within their means. Teach them to look for good bargains, involve them while your shopping and teach them to look for discounts.
3. Giving Skills
Generosity is a lifestyle. Teach them to share their blessings to their classmates, playmates and less fortunate people. For the more we give, the more we receive. Teach them to give to the church, so God will bless him more.
Have your kids donate a portion of their allowance to charity. It teaches them that money can be used to help people, rather than just for buying things. Remind them that it’s not how much you give — every little bit counts.
4. Earning Skills
They should learn how hard it is to earn money. Teach them how to invest, how to grow their money. As a kid there are a lot of things we can do to earn. Here are some ways we can teach them:
Doing extra chores for your parents or neighbors
Selling some of your things you no longer use
Use your skills, Teach someone how to use computers, make presentations or how to setup a Facebook account