6 Methods to Educate Your Youngsters About Cash Earlier than Summer time Ends
As a parent, it’s good to talk to our kids about money all year round, but in the summer most kids don’t go to school so they have a few more hours. Between ice breaks, gaming sessions, and summer work, it’s an ideal time to keep them engaged in activities and discussions about money. Starting early can help them develop healthy financial habits for life.
Children learn best through action. Whether it’s a vacation job or housework, there are many experiences that can promote financial responsibility and independence – traits that will benefit them into adulthood.
I have two little boys, 6 and 3 years old. Here are some of the experiences and discussions taking place at our home this summer:
Teaching the value of hard work
There is no better way for children to understand the value of money than to make it for yourself. Depending on your child’s age and interests, this could mean working at a local fast food restaurant, babysitting, mowing the lawn for neighbors, or taking on additional chores. Not only do they learn about earning, but completing the task gives them a sense of achievement that also strengthens their self-confidence.
With both boys at home for the summer and my husband and I working from home, the kids can be difficult to entertain. We had a chat with our elder and suggested that we pay him $ 5 for every day he entertains his brother camp-style. He loved the idea and we started with a plan: we made a calendar and he marked $ 5 every day he worked. We helped him, of course, but this approach allowed us to work for extended periods of time throughout the day.
Set a budget to live within your means
Whether your child is making money or receiving a regular allowance, it is important to continue the conversation by teaching the children the expenses in a way that is relatable to them. By teaching our children how to use their pocket money or income to get the things they want, they learn to work realistically with what they have.
After the first week of his “camp,” my son had made $ 25 and was so excited to look at the toy options. This was the phase when we introduced him to the concept of budgeting. We explained to him that he had to go for something that didn’t cost more than $ 25, and after some trial and error, he found a LEGO set that was within his budget.
The following week he showed us a bigger set of his please buy me these eyes. It was double his budget! We explained to him that if he wanted this set he would have the two weeks salary, so he would have to wait an extra week to have enough money to buy it. He understood and drove through both weeks to get the LEGO set he wanted. The concept of saving and budgeting stayed – he started working backwards on what he wanted and how much he needed.
Understand needs versus needs
When it comes to money, we all face choices. As soon as children start to spend their own money, these decisions are naturally noticed – for example, choosing between two toys. We can guide them to make these decisions by weighing needs and wants. A great way to initiate this conversation is to ask kids what they want more than anything: a new play system? A telephone? This LEGO set? Whatever it is, we can help our children create a plan to save for it over time. This teaches children that in order to have the things we want, we must plan.
And while we’re on the subject, we don’t have to wait for the kids to make their own money to have these conversations. At the beginning of summer we got almost new, used roller skates for my son to practice on. He quickly got used to it and started playing street hockey with friends. His friend had brand new, “cool looking” ice skates (his words). One day he came home and asked if we could get ice skates like his friend’s. We asked him a series of questions: “Are your skates uncomfortable?” “Are they getting small?” After talking to him, it was clear that he just liked the way his friend’s skates looked like. We explained that the pair he has may not be as pretty, but it works like a new pair. Although he wants a new couple, he doesn’t need them right now. But when the time comes and he grows out of these skates, we will include him in the purchase decision and he can choose the skates he wants.
Teaching Financial Decisions
Some lessons in money are learned through action; others can be taught through sharing experiences. One way to get children to think about money is to invite them into discussions about family purchases. With younger children, you can let them know you are looking for different options and when you’ve narrowed them down to the last two, let them know which items you shortlisted and why. Ask them what they think about the finalists. This allows them to be part of the process while also teaching them how to make decisions. The older they get, the more the children can get involved. For example, if you’re in the market for switching internet service providers, ask your teen to research the different options and come up with a recommendation based on features, customer ratings, and prices. You will likely want to have a say considering how often you will be using it on a daily basis.
Stay positive so that learning is fun
After talking to many other parents about money, I learned that we tend to fall into one of two camps. Half of us are confident about our finances and look forward to teaching our children how to make, save, and spend. The other half believe that talking to our children about money can induce feelings of stress, fear, and pressure. It’s important to remember that we don’t have to teach our children everything there is to know about money in one day, one week, or even one summer. Small lessons that accumulate over the course of life are more effective than one big discussion. Make sure things are easy, positive, and fun for you and your child.
Understand the difference between rich and wealthy
To be “rich” means to have money and wealth. Being “wealthy” goes beyond that; it means making money and saving so that you can spend it on what is important to you and your family. As parents, we want to give our children the knowledge, tools, and skills to literally lead a prosperous life. Teaching them to live within their means, work hard and make time for things they enjoy doing, caring less about material things, and building memories and positive relationships all contribute to a prosperous life. That is real wealth.
As with most things, it’s important to lead by example. During the summer, our family spends a lot of time outdoors playing games in parks, hiking, and camping – activities that give them new experiences that don’t cost a lot of money. We hope that, in addition to spending time together as a family, our sons also learn that the special thing about an experience is not the price, but the memories, what you learn from it and with whom you share it.
Lay the foundations for a healthy financial life
Learning the value of a dollar and earning, saving, and budgeting are the building blocks of healthy financial habits that enable our children to live full lives. As parents, we should talk about money with our children year round, but the summer offers unique opportunities for hands-on experiences and lessons that will last a lifetime.
Natalie Abenhaim is Community Manager at gohenry, a financial education and technology company with the mission to educate every child with money and to revolutionize financial education. Launched in 2012, gohenry’s award-winning, innovative product – a debit card and app for 6 to 18 year olds – helps parents teach their children healthy buying habits and financial skills that they can use in the real world.