7 Smart Ways to Teach Kids the Value of Money

Some parents believe that teaching about the value of money to their kids is not age-appropriate. They thought that kids are too young to learn about it. They had no idea that educating kids at a young age is already honing financially literate adults. 

You can start teaching elementary kids about the value of money. At that phase, kids are already learning mathematics. When they learn about the importance of money, they will also learn some life skills like excellent planning skills. 

Teaching the value of money may seem like a handful of work for some parents. But with proper teaching techniques, you will be able to create financially responsible adults. So, here are seven (7) smart ways to teaching your kids the value of money:  

Gain Money Through Hard Work.

Nothing in the world is free, so as obtaining money. Kids should know that if they want to buy something, they need to earn money first. And they need to work hard for them to make a penny. 

You can set up a reward system where they can get paid by doing household errands. So instead of giving them an allowance, you can reward them. That would act as their salary for every household task they've accomplished. 

For example, they can earn one dollar after washing dishes and another dollar for helping with dinner. You can set up a payday, where they can get their reward. It can be during weekends or Mondays. 

There are Consequences to Overspending.

When it comes to spending money, let your children decide on their own. This way, you are not only teaching them how to handle their money, but you are also teaching them to be independent.  

They may experience failure by making wrong decisions with their spending. It can be heartbreaking for us as parents, but let them experience loss. Let them learn from their mistakes. 

You can also advise them about good spending and saving habits. Tell your kids that when they already spend their money, they can never have them back. But, they can earn them again after doing some tasks. 

The Ability to Delay Gratification.

Tell your kids that they cannot always get what they want when they want it. Instil in their minds that things can wait. Make your kids understand the value of patience. All things they want to have for so long is worth the wait. 

Tell them not to rush with their decisions. They will be surprised when they realize that the thing your kids want to buy now may not be the same thing they would need the next day. Tell them that the things they want to buy now will not disappear, but it is their desire that might change. 

Also, tell them that they have to earn and save money to have what they want. Kids will learn that waiting and working for the things they want is more rewarding. 

Be a Responsible Spender.

Teach your kids how to be responsible spenders. You can give them three envelopes, one for their needs, one for savings, and another for their wants. Let them do the budgeting on their own to know how to take responsibility for their finances. 

If, for example, they want to buy a toy so badly but couldn't afford it, tell them not to buy it yet. Advise your children to save for it instead. You can also introduce credit cards but emphasize that it is not the answer to get their desires. 

But still, you can teach them the idea of using a credit card. Let your kids experience it so they would know the consequences. Like, they can have the toy, but they have to take it as a credit from you. That means they will do the chores without pay for the next week in exchange for the toy. 

Teach Children by Being an Example.

Kids learn based on what they perceive from their surroundings. And as parents, the best way to teach them about the value of money is by being an excellent example. Show them that you practice what you are teaching them. Remember, what monkeys see, monkeys do. 

You can involve them with some basic or standard financial decisions. That way, they will witness your spending habit. 

For example, you went to a moneylender Bukit Batok with your child to avail the best payday loan Singapore. It's what you and your husband are doing in times of tight budget.

Such a scenario will open your child's curiosity. It's better to give them insights into what a loan is and how will it help them. And that will slowly mould their thinking, acquiring a sense of discipline and bold financial decision-making. 

Giving is a part of Financial Literacy.

Giving to the less fortunate is another way to teach kids about the value of money. By letting them help in charity, they would learn how to sympathize with people around them. They would have a realization of our world's reality.

Let them decide what and how much they want to donate to charity. Aside from that, give them the chance to see the needy in person. When they get to see poverty-stricken people, they would learn how to value their money. 

Lastly, infuse in their mind how lucky they are since they can buy their needs and wants for themselves. And emphasize the joy they would feel every time they reach out to the less fortunate.

The Key to Financial Freedom is Contentment.

Having a sense of contentment is the most crucial concept that you can teach your kids. Nobody can ever satisfy their desires but themselves. Tell them to be content with whatever they have, that they are more fortunate than the others. 

For example, you already promised to buy them a bicycle, but still, they are asking for a skateboard. You can make your kids choose between a bike and a skateboard. That way, they will learn how to prioritize things as well.  

Teach them to be appreciative of what they have. Once your little children acquire that sense of appreciation, your children wouldn't seek more than what they need. Instead, they would focus more on how blessed they are.

For them to practice contentment, tell them to stop comparing themselves with others. Instead, focus on things that they already have and be thankful for having them. As parents, keep in mind all the other techniques will be useless unless they have a deep understanding of what contentment is. 

If you think you cannot teach your kids about the value of money, stick to these seven steps. You will be surprised that you are also learning from teaching your kids. Keep in mind that teaching them the value of money is the best gift you can give them when they become adults. They'll carry everything they learned into their generation.