If kids develop good financial skills from an early age they’ll be ready for the financial challenges of adulthood. Giving them a solid foundation and teaching them about money matters will help with their personal development. From an early age, there are three basics that children must be taught : Saving, Spending and Sharing.
Savings : Teach them saving by encouraging them to set a goal, like buying a gift for a friend’s birthday, or for buying a favorite toy or game. Discuss with them why this goal is important for them, and help them as they work towards the goal. As they grow older, the targets get bigger and the time set for achieving the goals becomes longer. For example, saving for a 6 year old’s birthday gift could take three months, whereas saving for a new laptop might take 12 months. When this foundation is laid, it will not be impossible for them to one day save for a car, dream house or wedding.
Spending : Teach them about weighing their options when they spend. Would the teenager rather buy a pair of sneakers now, or save until the end of the year and get the phone he really wants? This is a lesson in instant gratification. Let them observe you practicing the same values when it comes to the family finances. If they see you as an impulse spender, they will grow up thinking it’s ok to do the same.
Sharing : Teach them the value of sharing responsibly, and giving to those in need. Involve them when you give to charity. Let them give to something they truly care about, to make the experiences more useful for them