Michael Khatchadourina, 7, tries to open his piggy bank as he and his sister Krysta, 9, make a donation for victims of Hurricane Katrina at a daylong disaster relief collection event. (Photo : Getty Images/Ann Johansson)
A lot of people finish college wishing they were taught more about money because a lot of people still have no idea how to manage their money or balance their bank account. Kids nowadays should be taught these things because it is never too early to let them learn the value of money and the basic concepts of budgeting.
When they are older, they will be able to avoid making the same money mistakes many people probably did before. Here are a few tips on how to teach children about money:
1. Give kids their personal money to manage.
This is the very first and one of the most important steps toward teaching money management,According to Life Hacker. By doing this, children will learn a sense of responsibility when it comes to handling their own money. They can also be encouraged to keep their cash in a jar while they are younger until they are old enough to be trusted with their own bank account.
2. Teach them about the basics of budgeting.
As children grow older, they will eventually learn to decide how they will be spending their own money which is why it is only imperative for them to learn the basics of budgeting. This is going to be the perfect time to talk to them about savings. Another method they can be taught is how to make separate savings for the one they can spend for short term goals and one for the future.
3. Help children understand the value of money.
Kids should be able to understand the value of their money compared to the value of the things they would like to spend for. This way, they will be able to understand early on that it is not easy to save money especially when they become aware of the costs.
And as they learn how to spend money, they should also be taught about how to prioritize so that they know when to set some savings aside for the things they like.
4. Set a good example.
There is no better way to teach kids about money than to show them how it is done, according to Dave Ramsey. They are more likely to follow what they see as an example.
Here is a video about how parents should be teaching their kids about money:
