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10 Steps To Help Children Learn About Money Management - Expert's Tips

Knowing how to spend and manage money is an important life skill that adults must teach kids. Here are some simple but effective steps to achieve that.

Being Money-wise From Childhood

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Being Money-wise From Childhood

It's important to understand the value of money and have a basic idea about money management from a young age. Anita Madan, Head of Curriculum Development, EuroKids, tells us how.

Value Of Money: Start Early

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Value Of Money: Start Early

Initiating financial education at a young age is crucial as it builds a solid foundation for understanding money. Introducing simple lessons in saving and spending in ways that resonate with their age group, lays the groundwork for more complex financial concepts later on. For instance, introducing the concept of saving by using a piggy bank to collect spare change can be a fun and tangible way for young children to understand the value of money.

Teach Kids Need vs Want

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Teach Kids Need vs Want

Help kids understand the difference between essentials and non-essentials by illustrating everyday situations. Explain to them that while food and clothing are needs, toys and gadgets are wants. This can be reinforced by involving children in shopping trips and discussing choices made based on priorities. 

Money Management: Save, Share, Spend

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Money Management: Save, Share, Spend

The three S's of money - saving, sharing, and spending - provide a comprehensive framework for financial education. Discuss the importance of saving for future goals, the joy of sharing with others in need, and the responsibility of spending wisely. Consider setting up three jars labelled "Save," "Share," and "Spend." When children receive their allowance, they can allocate a portion to each jar, helping them develop a well-rounded understanding of their financial choices. 

Allocate Pocket Money

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Allocate Pocket Money

Introducing a weekly or monthly allowance system not only teaches budgeting and decision-making but also provides an opportunity for practical application. Encourage kids to allocate their allowance to different categories, instilling a sense of responsibility for managing their resources from an early age.

 

Teach Financial Goals

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Teach Financial Goals

Encouraging kids to set financial goals as it instils the values of patience and discipline. If a child wants a new video game, help them calculate how much they need to save each week. This goal-oriented approach provides a tangible way for children to understand the rewards of financial planning and delayed gratification.

Learning About Money Management

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Learning About Money Management

Emphasise that mistakes are opportunities to learn about money management. Share personal stories, such as a time when an impulse purchase led to a valuable lesson about budgeting. This helps children understand that everyone, including adults, learns through trial and error.

 

Parents Play Role Models

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Parents Play Role Models

Parents play a pivotal role in shaping their children's financial attitudes. Engage in age-appropriate discussions about budgeting, saving, and responsible spending.

Teaching Through Game And Activities

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Teaching Through Game And Activities

Incorporate fun games and activities to make learning about money engaging. Interactive online tools or board games like "Monopoly" can teach children about financial concepts such as budgeting, investing, and the consequences of financial decisions in an interactive and enjoyable way.

Saving Jar: Inculcate Good Habits

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Saving Jar: Inculcate Good Habits

Use a clear jar to help kids visualise the growth of their savings over time, reinforcing the connection between consistent saving habits and achieving financial goals.

Teach Children Responsibility

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Teach Children Responsibility

Teach kids that with money comes responsibility, like taking care of their possessions. Help them understand the value of hard work, and making informed choices that contribute to a responsible and fulfilling life.

 

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