So much of a child’s education focuses on learning traditional topics taught in school. As business development professional Fahim Imam-Sadeque explains, though, this alone doesn’t truly set children up for future success.
Many children go through their school years without learning about money. Yet, this is one of the most practical lessons parents can teach their children as they look to set them up for success.
The earlier parents start teaching their children about money, the better prepared they will be for adulthood. No time has to be set aside to do so you can integrate these lessons into daily life.
Here are some ways you can teach your children about money so they can have a bright future.
Show What Money Is
Parents can start their children’s financial education off young by simply showing them what money is. You should show them what paper money and coins are in your home country and explain what each stands for.
You can even educate children about what money is and how it’s represented when you make purchases at the store using a credit or debit card. After checking out, show your children the receipts and explain how each item costs a certain amount.
This will instil in children the habit of checking the prices of items before buying them, even if they use digital forms to make purchases.
Start Saving Early
Luckily, there is a simple tool that has been used for ages that can help you in this regard — piggy banks. Children need to learn that money isn’t used only for spending, that some should be put aside regularly.
Giving your children a piggy bank and putting money in it from time to time will help them see how money can grow when it’s saved. You can emphasize the importance of saving by having a savings jar in plain sight for the family, too. When parents show children that they are saving, it only helps to reinforce its importance.
Give Opportunities for Them to Earn
Children will only truly understand the saying “money doesn’t grow on trees” if they understand that money needs to be earned.
Many families give their children a weekly allowance as they grow older to learn the value of money. This doesn’t quite show them how to earn money, though, as allowances typically give money to children “free,” or without forcing them to do something to earn it.
A great way to do this is to set up categories of chores. The first set could be basic chores that children do but don’t get paid for. This could include cleaning their room, making their bed, and putting the laundry in the appropriate place.
Another set of chores will give them money. This could include raking leaves and other outdoor work or helping their parents clean the living room.
Teach Them to Budget
Once children understand what money is, how to earn it and save it, and how it’s spent, Fahim Imam-Sadeque says parents can start teaching their children about budgeting. This doesn’t have to be a detailed, in-depth analysis of spreadsheets.
You can help children learn about simple purchasing decisions using their earned and saved money. You can teach them how to use the money for things they need versus what they want.
About Fahim Imam-Sadeque
Fahim Imam-Sadeque is a business development professional with proven experience in the asset management industry. He has a Bachelor of Science in Actuarial Science from the City University of London and is a Fellow of the Institute of Actuaries. Fahim’s top skills include asset management, hedge funds, investment management, sales, and consultant & client relationship management.