Whether or not parents should open up an account for their kids is worth discussing, but one thing is for sure, children who have been taught how to value money grow up as adults who can manage their finances well.
When should parents consider their kids old enough to learn about money?
The thing is that kids, without them realizing it, get exposed to their parents’ spending habits and those habits can affect them as they grow up.
Here’s a guide to raising financially fit children.
No matter the age of the kid, they should be given a lecture about money when
1. The kid has a goal in mind
A kid as young as five years old would normally ask mom and dad for a toy, a game console or a gadget. Instead of turning down the kid’s request, parents can begin to educate their child that for them to get what they want, they should be prepared to save for it.
Or, parents can opt to put the reward system in place. If the child performs well at school, then they could be given that toy they want to have.
This will help develop the kid’s mindset that if they want something, they should either save for it or work hard to deserve it.
Teaching kids about money early on in life is the key to raising financially fit kids.
2. Putting it in jars is better than spending
Piggy banks are some of the best gifts for kids for raising financially fit kids. But putting loose change or leftover coins in a clear jar motivates a kid towards a goal.
The child may not always keep track how many pennies are placed in at the end of the day before hitting the sack but they can see if the stack of coins have reached halfway through the jar, inspiring the kid further to keep dropping the coins on a daily basis until it is filled up. Once full, they are ready to fill another jar. And another jar. And another jar.
3. FOMO hits
Yes, even your own kids are not exempted from the fear of missing out (FOMO). They go to school, see something their classmates have and feel left out of the trend. If it coincided at a time when there isn’t much money, you need to make the child understand that they should not want something just because they see others buying or using them.
For raising financially fit kids you must let them understand that wanting that trendy item now may not always mean needing the same trendy item a month later.
4. Consuming supplies
If you’re still using the bathtub, fine. But teaching a kid to use the shower head instead of bathing in the tub helps in keeping water expenses low. Same thing with usage of electricity, internet and other supplies necessary at home. It’s a stringent but and effective way of raising financially fit kids.
Reprimand your kids when they waste things at home and warn them that they need to pay to replenish the supplies with their own money.
Consequences are felt the most when it’s their turn to foot the bill. Don’t feel guilty about making them dip into their own coin jar to make up for some lost supplies like toilet papers. This will make them think twice about wasting supplies again.
5. Breakage occurs
This is somewhat similar to the previous bullet point except that playing around the house without a care in the world can topple some figurines or break the glass pane.
While not literally making them pay for the breakage, it would result to a reduced allowance “to save up to repair/buy a new one”.
The reduced allowance will make them appreciate the value of money more and feel the difference when they get their full allowance. You may have to be a little strict sometimes but this is very helpful in raising financially fit kids.
Teaching your own children to save up or be frugal is important for raising financially fit kids. Finding the best bank accounts for kids is not that hard and the sooner they develop the habit of saving, the better their rewards in the future will be. The best things that parents could do is ensure that their kids are self-sufficient and independent, able to make wise decisions about money and their future.