Updated: Apr 26, 2021
Parents should definitely teach their kids the value of money because it will help them manage their expenses and save them from unnecessary debts in the future. Here are five effective ways to do so.
For the initial stage, parents can buy a piggy bank for kids. Make sure that this piggy bank will be opened on a fixed day, not before it. The money collected in the piggy bank can be used to fulfil the demands of kids. This simple activity will teach kids that with small savings they can collect a handsome amount. Once they grow up, a bank account could be open where they can be taken monthly to deposit some amount. In this manner, they will understand that before spending they have to save first.
2. Give commissions not allowances
Rather than giving them commissions, family members should give them allowances in exchange for household chores and domestic help. As a result, they will learn the value of work as well as money. They will realise that money cannot be earned easily, one needs to work for the sake of it. It will also help them in future to become hardworking and sincere.
3. Say no to unnecessary demands
Sometimes kids insist on buying stuff that they don't even require. In this situation, parents should always say no to them and explain lovingly that purchasing things that they don't even need is merely a wastage of money. In the beginning, it will be hard to make them understand this but gradually they will leave this habit.
4. Tell them honestly how much you can spend
Sometimes children ask for an expensive item, but parents can't afford to buy that and say no to them. Children are innocent, they can't understand it unless parents tell frankly what they can afford and what they can't. We often see parents hiding economic conditions from their kids, but it will be better for both if children are aware of it.
5. Explain to them the difference between necessity and luxury
Children must know the difference between basic needs and luxuries. Parents can even take them to the areas where people can not even meet the necessities of food, clothes, shelter and can do some charity. This one act will help them value the resources they already have. Moreover, they will inculcate empathy and the habit of sharing as well.
In this process, they won't even learn only to manage money but also develop the qualities of understanding, helping others, the dignity of work and empathy. If you are able to do so, it would be a great success for you as a parent.