How to Teach Money Management to Your Kids to Raise Them Smart

Managing finances is always a head-scratching thing for adults. In today’s rapidly changing environment, knowing how to manage money is not just important for adults but for kids as well as it helps them become smart with money when they grow up. Here, we list some key measures on how to help kids learn about managing money the smart way:

Important Finance Management for Kids

Finance presents a lot of challenges in our adulthood. When we use the right budgeting, spending and saving skills from our childhood, we are more ready to tackle difficult money matters with a practical approach.

Money Concepts to Teach

Pre-School Kids

• Teach them how working is important to earn money.
• Help them understand that you need money to buy the things you need and want.
• Teach them about spending money on needs and wants.

Primary School Kids

• Tell them the importance of saving money, how to shop around after comparing prices.
• Teach them the importance of not sharing personal financial information with others or online.

High-School Kids

• Make them pay for their basic things through any pocket money they earn.
• Teach them about earned money, credit card limits which is borrowed and has to be paid back with interest and saving for emergencies
• Make them smart about limiting their expenses and finding ways to keep track of their spending with budgeting.
• Let them use cash instead of credit.

Pick the Right Time and Place to Talk About Money with Kids

Real-life situations play a greater role in making children learn about finance management in the best way possible:

• Budgeting

When you create an expense budget for the month, involve your kids, which will help them learn the essential expenses you need to budget for. They will know more about cost-cutting, spending and saving and why necessity is more important than luxury.

• Supermarket

Take them to the supermarket, show them the prices and talk to them about how to compare and pick the affordable options so that you can stick to your budget.

• Bill Payments

Help them understand that utilities like electricity, internet and phone costs money and how you have to keep your usage limited to keep the bill expense under control.

• ATM

Show them how you withdraw money from your bank account and what amount limit you have set according to your budget and savings requirements. Depending on your children’s age, consider giving them some pocket money for their basic expenses.  This will help them understand the value of money, how far the money can go and how they have to manage their expenses depending on how much money they have to spend.

Share this post?