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6 Most Important Money Lessons to Teach Your Kids

6 Most Important Money Lessons to Teach Your Kids

Finance education may seem to be too much for kids, but teaching kids about money is essential because sooner or later, they will be dealing with money themselves. It may help if you get started with the money lessons as soon as your kids begin receiving an allowance.

In this article, let's take a look at six important money lessons that you can impart to your kids:

  • Teach them to set savings goals

    Introduce the difference between needs and wants. In this way, they will see which items to prioritise first, and work to achieve them. Just make sure that the goals are realistic, making it easy to achieve them and gain a sense of accomplishment that will eventually keep them motivated to save more.
  • Involve them in conversations about money

    When your kid wants something from the department store, you can explain why you cannot afford it for now because you have to pay the bills first and that is not part of the current budget. Exposing them to real-life scenarios like this will prepare them for their own money challenges later on.
  • Money is something that you work for

    Giving kids a sense of entitlement by handing everything to them will make it harder for them to understand that money is earned. Explain why parents go to work every day. You can also let your kids earn their own money by creating small projects or having a garage sale of their pre-loved clothes and toys.
  • Teach them the concept of investing

    This can be challenging, but teaching your kids even just the basics of investing can give them leverage compared to those who start investing later in life. They may not start now but their knowledge will prepare them much sooner.
  • Save for emergency situations.

    Aside from saving for their needs and wants, you can also teach them to save for the worst. When in a tough situation, every penny counts, and having savings will help you and your kids get out of a tough situation instead of getting a loan.
  • Think beyond saving for a rainy day.

    Teaching kids about money can also cover helping others. Just imagine how amazing it would be if your kids work for money to help those who are in need. You can have a family activity wherein the proceeds will be donated to charity or less fortunate kids in the community.
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