5 Ways To Teach Value Of Money To Kids

value of money

“It’s all about Money “   

This has been the reality for long. Though, money cannot buy happiness, it can at times help you to attain or buy lots of things.

As parents, we have to teach kids many things, one such quality that we need to inculcate in them is the value of money.

Sooner or later the kids will have to handle monetary matters themselves so its important that they know the value of money.

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The earlier we teach them the importance of money and prudent ways to handle it, the better for them. Now, like everything else in parenthood this is also a Catch 22 situation.

As parents, we cannot teach our kids that money is the most important thing in life. That would skew their mind and make them money minded.

On the other hand, we also cannot teach them that everything they want can be easily bought as that would make them materialistic. So, we must tread the path very carefully.

Here are some fun and tested ways to teach value of money to kids.

 

INCLUDE THEM IN FAMILY BUDGET DISCUSSION 
The biggest mistake we make as parents is to abstain kids from any kind of monetary related discussions.

Now, I do not sit across the table with my kids to discuss when the electricity bill is due or who pays the car insurance bill.

However, one of my friends suggested that when they discuss on family outings, they sit with kids and tell them that they have a fixed budget like XXX and in that budget, either a 2 weeks in Goa or 1 week in Singapore could be done.

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I am planning to do the same with my daughter soon. I am sure slowly she will get to know the value of money.

 

INTRODUCE THEM TO SAVINGS:
This is a fun activity for kids. Buy them an attractive piggy bank and tell them to use it for making savings.

Teach them that if they save money in it for 3 months then they can buy what they have been eyeing for.

Like, my daughter wanted a doll house for a very long time. I bought her a cute terracotta piggy bank (Yes, I did my bit for nature) in the shape of a Grandfather and Grand Mother and asked her to keep saving in it for sometime.

 

 At the end of the year when we broke the piggy bank we were only a few bucks short of the cost of the doll house.

I filled in the shortfall amount as a reward for saving money all year long. This taught her the fact that everything she wants comes at a cost.

Also, it taught her the importance of saving and the power it brings when the money accumulates. An easy and fun way to teach kids the value of money.

 

OPEN AN ACCOUNT IN YOUR KID’S NAME
Once, your child understands the importance of saving  in the piggy bank, introduce her to the world of banking as they should know the value of money.

It is like graduating her from an earthen piggy bank to the actual financial world.

There are many banks that offer kids specific savings account. I studied them and found ICICI bank and Kotak bank the best.

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Both banks have specific kids accounts that allows them not only to save money but also invest money.

Opening a bank account makes kids feel important. They think, just as parents have bank accounts even they have.

Make it a point to save a fixed amount in the bank on a yearly basis. This will also help you save money for them that will come handy to fulfill long term goals.

Take them with you to the bank regularly. Kids will find the adult world of banking fascinating .

They get inquisitive and ask you several questions to clear their doubts. This will familiarize them to the banking world and not intimidate them in future.
This of course will prove as a big step in teaching them value of money.

 

TEACH THEM TO HANDLE CASH
We are used to using plastic money in our daily life. Once the kids are about 4 to 5 years start using cash and coins in front of them.

This way they will know that everything they want is not free at the shop and comes at a cost that needs to be paid with cash.

Say, if they want to buy an ice-cream for 20 bucks, give the money to her and let her deal with the ice-cream man. This will teach her the importance of handling cash as well as she will get to know the value of money.

 

LET THEM PLAN:
Once your kid starts to save, give her the liberty to plan as to how she wants to use it.

She might have a huge list of things she wants to buy. Let her allocate her savings to what she wants to buy first.

This will teach her to make important values about making choices.

There will be times when she makes wrong choices but so be it at the end of the day, it will be her choice and she will learn to live with it.

So, all the mummy’s out there. start using these simple ways to teach your loved one the importance of money.

Oh yes! if you are following any different approach then please let me know …

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Linking this post with #mondaymommymoments hosted by hosted by Amrita and Deepa

 

39 thoughts on “5 Ways To Teach Value Of Money To Kids

  1. dipika singh

    A very essential lesson for kids here, let them learn when they are really young… by the time they reach the age of maturity – monetary maturity will prevail. But at the same time we have to see it’s not overdone.
    Lovely post.

    Reply
  2. Deepa

    Good points you have mentioned here. I think opening a bank account is the most popular on I see today in all the posts. Thanks for linking up with #mmm 🙂

    Reply
  3. Amrita Basu (Misra)

    Letting them plan is something which I think is very important too.Just earning and saving is wonderful but learning to grow it or planning to use it well is very important too.Thank you for writing with us for #MondayMommyMoments

    Reply
  4. jnecke engeberg

    My kids are all grown up now, but I have always tried to teach them the value of money and how to not spend more than you actually have. Dont like credit cards and have learned them early on to save for something they want. They are all good with money as far as I know 🙂 Thanks for sharing – important stuff!

    Reply
  5. Chandra Shekhar

    It’s a very impressive post mam, financial responsibility is a very crucial thing that children should be aware of. It’s an aspect where nobody pays any attention. Love your content. Thanks for sharing.

    Reply
  6. Roby H.

    There’s actually a couple of really good podcasts that talk about financial independence and frugality, too. Maybe do an article covering those? I think that would be awesome!

    Reply
  7. Ashima Jain

    This is a very well written post. I agree with your view point that children should be taught the value of money from a young age so they grow up into financially sound people. With rising costs of living, it is an important step in preparing them for their future.

    Reply

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