Teaching Children about Money
For many children, money seems to be an intangible concept – something that truly appears out of thin air whenever they need it. Psychology shows that how we handle money goes back to our childhood. Starting early will mean that they adopt responsible habits that will last them through their lives.
Pocket money provides a valuable opportunity to learn about the world of money, no matter what age your child is. By giving them a certain amount of money per week, you are giving them the opportunity to be independent and responsible with saving and spending.
Pocket money also teaches children about the importance of saving. They may not be able to afford something now, but if they save, they can buy it next week.
Money isn’t something that should be hoarded, and the idea of never having enough is definitely not a mindset you want to instil in your child. Teach them to be generous at a young age. Encourage them to donate even $5 to a charity of their choice. Choosing to donate your money, even the smallest amount, will set a good example.
This giving back to the community will help your child grow into a mature, caring and responsible person.
When you go shopping, teach your child about money by involving them in decisions. Show them that some products cost more than others, and ask them to think about why.
If you have a budget, tell them about it and explain why. Encourage them to get involved with it too. A good way to do this is to place them in charge of a certain part of your shopping, for example, cereals. Tell them how much they can spend in order to meet the budget, and give them an opportunity to prove themselves.
Take them to your bank
It is important for children to have a concrete understanding of money. For this reason, withdraw money from an ATM instead of using a card, and show them how you do this. Understanding where money comes from will help them understand how money can be used.
After you withdraw the money, go to the shops and purchase something. Encourage your child to pay for it by giving them some cash. It is especially useful for them to see how the system operates, and how money changes hands.
Open a Child Savings Account
While you are at your bank, consider opening a children’s savings account. Involve them in the process. Tell them about how bank accounts work, why you will be saving money, and when they will be able to use it. This personal involvement will truly cement their understanding of money as something that does not grow on trees.
Early Learning Schools
Important lessons, such as how to interact with money, are often taught at Early Learning Schools.
At Hamersley Early Learning School, we actively encourage nurturing, growth and learning. For more information on us, and the programs we offer, call us on (08) 6162 9119 or visit our contact page for other ways to get in touch.