One of the good aspects of being financially savvy is the ability to teach it to the people around. You can teach anybody around you; colleagues, neighbours, friends and most importantly the kids around you. Kids look differently at things you have experienced long before. They are creative, impulsive, curious and extremely new to everything. You can create a financial structure in their head and they will learn to be financially savvy when they become an adult.
Model good money behaviour
You do not need to teach them about money, it is better to showcase financial philosophies and behaviours in your own life. Just be a good model and show how much you can save and how efficient you are when dealing with money matters.
Do not use negative connotations with your money
Using idioms such as ‘We can’t afford it’ may worry a child and think that his/her family is not secure financially. Try changing a negative statement to a positive one e.g. you can choose to say ‘We choose not to spend our money that way’.
You should approach shopping, not as a social hobby or a leisure activity but shopping as a necessity. That way you will not expose your child to be a part of a marketing culture that supports impulse purchasing and unnecessary consumerism.
Familiarise them with the banking environment
Encourage your children to experience the banking environment by taking them with you to a bank and show them the processes. You can utilise a demo savings account for them and they will start to become responsible with their money.
Make them set goals and save or work for those
You can elaborate on the budgets, prices and the things they want to have and then show them how to save over weekly terms so that they can see how to save and how to reach their goals to buy the item at the end of saving process.
Differentiate between wanting and needing
When you look at shopping places full of items, it gives the idea that there are so many things offered and so many things that you need. So it is important to draw the line between wanting and needing. Yes, some products are useful and you want them, but do you really need them?
Show Them their savings
Pick a box, jar or anything you think will fit for the purpose. Then label it. Start small with coins and small amounts to save for a while. When you have collected the required amount, count them together and give them the cash to let them buy their own items in the store with their saved amount. This process will help them understand the importance of saving for things they really care about.
This post was written by Kiako