Money Personal Finance

How can you teach money management strategies to kids?

teaching money management strategies to kids

Does the idea of teaching your children money management strategies make you worried? Don’t worry, if your answer is ‘yes’. There are many people like you. However, you should teach money management strategies to your children right from the young age.

Teaching kids about money – Why is it important?

Like many other things, kids are not born with the knowledge of managing money. Moreover, it’s not quite a talk about term in the household. You might be talking about paying bills, but rarely you discuss your money management strategies in front of kids. Not only that, some parents also feel awkward to talk to their children about money.

However, you need to be sure that the kids are able to manage their money once they leave the nest. So, you also need to teach them smart money management strategies just like you teach them how to cook some basic meals or do the laundry.

Teaching kids money management skills – How can you do that?

So, we’ve understood that it’s important to teach your kids how to manage money. But, the question is, how can you do that? It’s not that tough as you’re thinking it to be!

Here are the 4 simple ways to make your kids money smart.

  1. Teach the art of saving money – Make saving fun in order to motivate your child. Let your child receive prizes for a coupon he/she has cut out from a newspaper. You can also give prizes if your child can save from his/her pocket money.
  2. Encourage your child by matching contributions – You can encourage your child by doing a ‘savings match’. Whatever your child saves, match the amount. It’ll encourage your little one to save more. Moreover, he/she’ll also learn the concept of a retirement savings program.
  3. Develop strong math skills – A person usually tends to use emotional ways to invest if he/she doesn’t have math skills. So, teach your kids basic math skills so that they are good with numbers. Maths is taught in schools; what you can do is encourage them to learn strong math skills.
  4. Let your child make mistakes – Do not stop your child from making mistakes. The financial loss won’t be much at a young age. So, if your kid is spending money, what he/she has got as a birthday gift, before thinking. Let him/her do that. He/she will learn from the mistakes and it would stop him/her from making similar mistakes in the future.
  5. Encourage your kids to ask questions – Your little one can also ask questions. When your child asks anything about personal finance management, answer his/her queries. It might be difficult to make him/her understand everything especially if your child is small. But be patient and answer the queries according to your child’s age. This will help your children make appropriate financial decisions once they grow up.

Are there apps for teaching money management skills to your child?

Yes. Nowadays, teaching money management skills is not only restricted to just piggy banking. Don’t give your smartphone to your kid only for playing games and use it to teach smart money management strategies.

Piggybot is such an app which you can say is a digital version of an actual piggy bank. With this app, they can visualize how much money they got from their mom and dad.

Renegade Buggies is a game which you can download. Your kids will love it as it’s a fast-paced shopping game wherein they need to save as much money as they can. As your kid will go on completing one stage after another, he/she will accumulate ‘buggie bucks’ which they can use to make saving as well as investment decisions.

Famzoo – Another superb one! In this app, you can create your child’s bank account to track your little one’s spending, saving and giving habits. This app can help your kid to learn about budgeting.

I want to mention another important point. Be a good role model for your child. A kid often learns from his/her parents. So, if you practice good money management skills, your children will automatically learn from you. You can also set an example. Take a jar and put money in it. Let your child watch it and tell him/her that it’s your savings jar. This way your child will know saving is normal and it’ll motivate him/her to save, too.