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According to research at the University of Wisconsin-Madison, 3-year-old children will understand that money is used in exchange for what we need. Furthermore, research from Cambridge University concluded that building good money management habits will be completed when your kids are seven years old.
It can be seen that during the period of kindergarten to Primary school is a perfect time to start cultivating attitudes and developing good financial habits. For the first-time parents who still have no idea how to start, ACU PAY will recommend 5 financial things that should be taught to your kids at a young age.
Try talking about the importance of saving with your children such as a saving goal for a short term and long term or a saving for emergencies. You can give some examples to your kids such as letting them set their savings goal on their own. For example, do a saving for something they want or a long term saving for use when they grow up if they want to.
You can open a bank account for your kids’ savings or an easy start which is saving in the piggy bank. It is recommended to be a transparent piggy bank so that your kids can see the increase of their money.
To motivate your children a little more, you as a parent can offer special money or extra money under the specified rules. For example, if they can fill up the piggy bank everyday till 1 month, you will give 20% more of the savings.
Parents should let their kids manage their money so that they are aware of the value of the money. You should give a proper amount of money that covers all the expenses of your kids in a day and a little remains for saving.
Moreover, you may let your children try to simply manage the budget by having them decide to shop on a limited budget. When going to a convenience store, you may give your child the problem of what they would like to buy under the determined amounts and how they select those goods under the budget so that they can practice comparing and making decisions.
When they have money left each day, help your children to take care of the rest of the money. They may put it in a piggy bank and help them record the savings.
Teach children the difference between “need” and “wanted.” Start by observing the origin of demand, which may ask the question “Why do you want this? Have you seen your friends use it, or have you seen it on the Internet?” When your children want something that is not needed, you teach them to prioritize things and not spend all their money on what is wanted.
As children grow older, this skill allows them to manage money better, to prioritize, and not squander.
Training your children to wait patiently (delayed gratification), when they grow up, they can resist temptations which make them want to buy at the first glance. Before going out to buy something for the family, help set up a budget to pay, estimate and compare the prices, and use discount coupons, including promotions such as “Buy Now Pay Later” that cause credit card debt. These will teach your kids how to shop wisely and get used to planning before going shopping.
Training children to share some of their money, teaches them that their money can be used to improve other people’s lives, rather than just buy what they want. Sharing for helping others doesn’t have to be a huge amount; just a little money from many people can make a difference.\
