Currently, money runs the world. It has also become essential for children to learn about money and develop good money habits in recent times. Our generation’s most significant investor, Warren Buffet, says, “Rule #1: Never lose money, and Rule #2: Never forget Rule #1.”
It is far more difficult for kids to learn about money than adults. Kids have not seen the world, they are like a blank canvas, and with their curiosity and naivety that is prone to make mistakes, they must be taught money lessons.
Kids will make many mistakes if they get money as they do not have the wisdom to use it wisely. However, kids making mistakes is part of their growth. So, as parents and guardians of kids, it becomes your responsibility to teach them, especially young ones before the age of 15, how to manage money effectively rather than blaming them for their mistakes.
Why is it important for kids to save money?
With children growing up becoming more and more familiar with the world of technology, it presents lots of opportunities and comes with its hidden dangers. Child-focused advertisements, online gaming, social media, etc., are some of the ways a child can be drawn to the world of money while not understanding the concept of how hard it is to earn it.
Once your kids reach 18 years and older, they need to manage their finances on their own. So, teaching them about money-related matters before the age of 15 not only will help them avoid the dangers and pitfalls of losing money but also prepare them more for their future financial problems. Learning about money needs to be an essential part of a child’s education to tackle financial difficulties in the future more effectively.
Young children are at the age where they are best suited to learn. So, here are 20 money lessons that you can teach your kids before 15.
Money Lessons To Teach Your Kids Before 15
1. Spend time with your kids and get to know them well.
To begin with, start by knowing your kid. You cannot impart any lessons to your child without knowing them well. Spend quality time with your kids, get to know their likes and dislikes, especially their views regarding money. By doing so, you will have an idea of how to teach them money matters effectively.
2. Make them proficient in arithmetic.
Money-related matters need arithmetic to solve. There is no need to teach your kid highly specialized arithmetic; simple addition, subtraction, multiplication, division, factors, percentages, etc., will do. Make sure that your kid becomes proficient enough in these topics to work with money well in the future.
3. Teach your kids the difference between need and want.
You need a new smartphone for contacts and other educational matters, that is a need. However, your latest version smartphone with a bunch of newly added fancy features, that’s a want. Teach your kid this difference between need and want thoroughly to make him less extravagant with money.
4. Keep a close eye on your kid’s spending habits.
Make sure you know what your kid is spending on. Be it new clothes, gifts, or other nonsensical stuff. It would be good to keep a close eye on the online spending habits of your kid.
5. Give them a transparent money jar to save their pennies.
A simple and effective way to teach your child about saving money is to gift them a transparent money jar and ask them to save their pennies. A transparent money jar allows your kid to see how saving a little bit of money over time will garner a significant amount in the future. This will teach them the lesson of saving money from a young age. It will also give your kid confidence in saving as he can directly see his money growing every day.
6. Tell them about how you earn money.
It is ok to tell your kids about what you do and where your income comes from. Doing this will help your kid realize that money does not grow from trees and is difficult to earn. Most parents do not prefer to talk about their financial status and income with their kids and expect their kids to be perfect about handling financial matters in the future. This seems a bit unrealistic. So, tell your kids your source of income without any embarrassment or hesitation.
7. Give them lessons about charity and sharing.
Sharing is caring. Teach your kids to be kind from a young age. As kids learn from their parents, set an example. You can take them to charity events, ask them to volunteer for caring for the elderly or even teach them to give money to a homeless man on the road. This will teach them a valuable lesson that will help them become better people in the future.
8. Give them rewards for performing tasks and errands on the house.
Ask your kids to do some small errands like cleaning up the sink, mowing the lawn, etc., and pay them a small amount after every task is completed. This will teach them about the relationship between work and money. And they will learn to appreciate money as they have earned it with hard work.
9. Check your kid’s online activity regularly.
This is to ensure that your children are not involved in excessive online gaming or other money-burning internet applications. You can use parental controls and other online activity tracking apps to monitor your child’s internet use. And if you find any abnormalities in your kid’s online activities, confront your child immediately.
10. Train your kids to make simple accounts.
Teaching your kids skills relating to bookkeeping and accounting will help them establish a mental record of their accounts in the future. You can train your little accountant by teaching them to keep small accounting records on their pennies earned during thanksgiving, birthday gifts, Christmas presents, etc.
11. Teach your kids about simple and compound interests.
You can teach your kids how to calculate interest. Teaching your kids about simple and compound interests will give them an idea of how to calculate interests on their sum. This will immensely help them in the future when they become the age to manage their financial matters on their own.
12. Teach your kids about taxes.
As taxes are an essential part of society, your kids must learn about them early. Talk about the different types of taxes, tax laws, and how you should always pay your taxes on time to your children. This will help your children be intelligent about tax-related matters in the future.
13. Give your kids lessons about work hours and savings.
You should also teach your kids about work hours and earnings. As an example, if you work for an hour, you will earn $15. So, you can ask your kids how much they will earn by working 5 hours. Teaching them about work hours, pay hours, and savings help them mature in money-related matters early in life.
14. Control your kid’s addiction to smartphones.
Smartphone addiction has become a big modern-day problem that severely harms your kids, mental and emotional status. And as your child starts spending more money online through smartphones putting pressure on your family’s finances, it becomes crucial to control his smartphone addiction. A suitable method is to give your child dumb phones instead of a smartphone to curb his smartphone addiction.
15. Teach your kids budgeting and financial debt.
Teach your little kids how to manage their budget effectively. For example, give them $100 and tell them that they cannot have money for their new toy if they buy new shoes. Moreover, you should also teach your kids not to perform gambling or similar activities from an early age to avoid them falling into debt in the future. Teach them about how bad having debt will be.
16. Create a bank account for your kids and teach them how to operate them.
Teach your kid about banking at an early age. You can open a bank account for them and guide them on how banking transactions work. You do not need to teach them more specialized banking terms, but some simple banking concepts still need to be taught.
17. Talk about loans and loan repayment with your kids.
As your kids get older, they have to care about different types of loans. Student loans, home loans, etc., are just some of the loans that a person encounters in his life. So, teaching kids about loans and loan repayment before their high school will have its merits as they will be aware and make sound financial decisions in the future.
18. Teach your child how to spend money on birthday gifts, Christmas presents, parties, etc.
Your kid might use the money to buy birthday presents, Christman gifts, or use them at parties. You should be aware of this and teach your kid what to buy and what not to buy as gifts. Teaching your kids these things at an early age helps them grow to be thrifty in the future.
19. Talk to your kids about their money troubles.
Your kid might have money trouble of his own. Make him realize that you will always be there if he needs to talk to anyone about money-related problems. Listen to his money problems and give constructive ideas to solve the problems. This will improve your parent-child relationship and make your kid more confident about money problems in the future as they will know you will always have their back.
20. Encourage your kids to learn creative skills apart from the school curriculum.
If your kid learns more creative skills at a young age, it will help him earn more money in the future. So, as a parent, you need to encourage your kids to learn more skills that are not taught in school-like programming, web design, etc., and show them how it will help them make more money.
To sum up, kids in modern days need to learn about money at an early age. It will help their growth and make them more sensitive to money matters to not fall into any sorts of traps in the future. Now, with the 20 important money lessons that you, as a parent, can teach your kids, your kid is sure to take money seriously and be self-conscious while spending money in the future.