We give you some suggestions how to teach your kids basic principles about finances, including charity, budgeting, how to save money and other.
Probably it is not necessary to underline how important to teach your children basic concepts about money. The only question is- how to do it properly? While helping your kid with riding a bicycle or making a sandwich, talking about money usually is not easy for parents. As a matter of fact, it was discovered that parents would easier talk about sex or drugs. Why is this case? Presumably, it is because parents themselves do not know much about money managing, and, not surprisingly, parents are the main influence on the financial behavior of their kids.
We bring you some down-to-earth strategies for kids to help them with some financial aspects of life.
Kids as young as 4 years old can be taught a valuable habit of giving back. Talking to your kid about why we all need to give, and explaining how a few dollars can help someone in need is a good way to teach him how to do charity. You can even raise his offer: if he saves a quarter, you will add another quarter of your own. Together you can find organizations which use small amounts of money for big thing and a greater good. You can choose between international organizations, helping farm animals and collecting supplies, or local animal shelters and paying medical expenses for someone from your community.
This is probably one of the most critical skills you can learn your 4- and 5- year old kids. Adults need to teach children how to exercise smart saving, spending and investing for a long period of time. For example, you can get your kids a butterfly hatchery. It takes about a month for caterpillars to become a beautiful butterfly. During this period you can make an agreement with your kids to take care of the hatchery and to reward them for each stage of butterfly development. This way, the kids will watch their saving grow with period and their future butterfly.
Finding cheaper options
And the best way to do it? By making a dessert! This is an activity for 6-year-old kids which will teach them about a budget. The first step is to visit a local bakery and find out a price for apple, peach, blueberry or any other pie. Then, you pose a challenge to your kid- can you bake it for less money? Give him the recipe, and head out to a grocery store where you will find the price for each ingredient. If the sum of ingredients is lower than the price of pie- get cooking. If not, you should teach him about the comparison of shops (where to find cheaper vanilla extract?). Do this until a way to do this for less money.
A penny saved is a penny earned. Or more than a penny, if you put it in the interest-bearing account. This is presumed to be a cornerstone for personal financial planning and you can teach this you 7 years old kids. To make sure they understand interests, give them a concrete example with an e an exaggerated rate of 100 percent.
Give your kid a penny. During next couple of days, give him an equal amount of money he has. After 11 days, your kid will have $10.24, and all thanks to compounding interest.