How to Teach the Kids the Value Of Money
The 5 Most Important Lessons to Teach Your Children
Many people wish they’d have been taught more about money when they were younger. This could be from parents or schools; the truth is we just wish we knew more when we were younger – particularly before that first student credit card came in the mail, or before signing up for student loans. The good news is that there are many resources today for children and adults, such as Moneybanker for example. In considering what to teach a child about money, the 5 most important tips on how to teach the kids the value of money have been outlined. They aren’t everything, but they are a great place to start.
1. Money isn’t Everything
The Dalai Lama once said: “Man sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.”
2. But Money is Something
What is money, really? Money is a medium of exchange. It is a way to trade one thing for another. Without money, we would have to use something else, such as pig manure, eggs, or an hour’s labour. Describe going to the movie with any of the above instead of money. Talk about saving up such tender! It will help put money in perspective.
3. Find Something You Want & Save for it
As mentioned before a terrific site like Moneybanker offers a significant resource for finances. Among them are concepts like setting goals and saving. You should talk to your child – when he/she is 5 or older – about a toy or game he wants to save for and encourage him to do so.
If he does not get a set allowance, then teach him about specific work that will lead to him getting the money he needs for it. This will not only teach your child about hard work equating to having good things, but there are lessons in the actual purchase, such as choosing something within a budget, then handing the money to a cashier, and getting change.
4. Saving for a New Car vs. Saving for Retirement
The book ‘Smart Money, Smart Kids‘ covers the topic of buying a new car on a loan every 5 years versus paying cash for a vehicle and saving for retirement with the car payment.
The difference is staggering. In one situation you have a nice vehicle that is shiny and new; in the other, you’re a multi-millionaire! Talk to your child about what that means. Describe how by not getting a new Nissan Maxima or Honda Accord from the ages of 20-60 they can buy a new Tesla or Ferrari every year from 60-80. Also, they can do really nice things for other people instead of struggling to take care of themselves!
5. Show Them Bills & Statements
Staying in the present is important, too, so for that reason children should get a look at monthly light and water bills. This will allow them to associate what they get (comfort) with a cost. Also, it will encourage them to consider switching off the lights when they leave a room.
A Great Start
By introducing these 5 things to a child they will have a great foundation to build upon. Without it, things might get rough when they are older, even if they don’t have to be. Should you have got any more great tips on how to teach the kids the value of money please don’t hesitate to tell us about your own experience in the comment field below. Knowing how and what to teach a child about money has never been more important than nowadays.