Teaching children the value of money and investments

Today’s kid will sure be the adult of tomorrow. His or her ability to effectively manage money wisely/usefully will depend largely on what he or she learns about money. Thus, teaching your kids financial literacy as they grow will impact on their money management culture as they grow into adults. Catch them young they say. 

Your kids will later in life be confronted with money decision making such as renting an accommodation in school, taking college loans (where they exists), dealing with credit cards, buying clothes and other personal needs. 

Their formative knowledge of money will most certainly determine how they are able to handle their money matters effectively when they grow up and become better citizens with good financial habits. Good habit/attitude about money lasts forever.

Whilst there are no hard and fast rules of how to teach your kids money management capabilities, Frances Bekey, in a presentation on ‘You, Your Kid and Your Money’ gives some useful tips. They include: 

Distinguish between Needs and Want.

 Let them understand your values of money

Distinguish between saving, investing and spending 

Use fun games – money games – monopoly

Play shop games – pretend to sell things 

Shop with kids: allow them to pick and pay for items 

Let them experience getting “change” from cashiers and learn how to count.

Show them how to compare prices/discounts

Involve kids in paying for items in shops

Encourage them to save and reward them with bonus, toys, dresses etc 

Encourage them to buy and pay for their toys etc. 

Teach them to set goals (save to spend)

Teach them how to shop on-line

Also teach your kids saving for the rainy day; borrow, pay back and interest; earning pay – hard work, and the concept of tax, pay slip, deductions. They should also operate a bank account to manage finances better; monitor their mobile phone expenses, call/data expenses and use budget to help work out how they should spend their money. 

You will also teach your children how to buy smart and encourage them to keep records of their spending – obtain receipts.