A lot of teens nowadays do not understand the value of earning and spending money. They were not oriented that investing is necessary even if they are still students. As parents, you play a crucial role in this area.
You should be able to teach your kids how to save money. They should be able to understand the concept of money and investment as early as childhood. This will prepare them to learn money management,as they grow older and good money habits will be formed.
1. Your children should be educated of the meaning of money. Once your children have learned how to count, that is the perfect time for you teach them the real meaning of money. You should be consistent and explain to them in simple ways and do this frequently so that they may be able to remember what you taught them.
2. Always explain to them the value of saving money. Make them understand its importance and how it will impact their life. It is important that you entertain questions from them about money and you should be able to answer them right away.
3. When giving them their allowance, you should encourage them that they should keep a certain amount for the future. You can motivate them to do this by telling them that the money can be saved and they can buy a new pair of shoes or the toys they want once they are able to save. This is early goal setting.
4. You can also teach them to work for money. You can start this at your own home. You can pay them fifty cents to one dollar every time they clean their rooms, do the dishes or feed their pets. This concept of earning a little money will make them think that money is something they have worked for and should be spent wisely.
5. You can teach them to save money by giving them those can coin banks which you deposit coins in, and wait until they are full before they can be opened. You can also open bank accounts for them and let them deposit money from their allowance into the account themselves. You should always show them how much interest they have earned to keep them motivated.
6. You should teach them from a young age that in reality there really is no such thing as something for nothing. If you teach effort finds reward they will instinctively grow up learning that there is an exchange of something of value for reward. Parents are all too often guilty of simply handing things to their children without any effort on their part.
7. You should teach them at a young age about compound interest. It was of course Albert Einstein who stated that the greatest invention ever created was compound interest.
Money and saving is not something that is learned by children in one sitting. You should be patient in teaching them and relating the value of money in all of their activities. Children will learn this easily if you are patient and consistent in guiding them and encouraging them in this endeavour.
Diane Cossie has creatively brought together an imaginative way to introduce simple money management techniques to children as young as 6. Kids Money Packs are available to download straight from the website at http://www.kidsmoneypack.co.uk
