Help Kids Learn How To Make Smart Spending Decisions

Money is important for everyone to meet needs in our society and it is essential to learn money management skills. Financial literacy is something that should be taught at a young age. Financial education for kids is important to help them become financially confident adults. Monetary management skills are nurtured through habits, ideas, values, and attitudes we attain about money as we grow up. 

Financial coaching for kids is important for the financial success of your kids in the future. Teach your children about money at a young age and keep on discussing it as they grow older. You can do this through various financial literacy activities for kids. Continue reading to learn how you can help educate your kids regarding money management and personal finance.

A guide to financial literacy for kids

Financial education is about knowing the fundamental financial or money management principles and implementing them in your daily life. Financial planning for kids helps them become self-sufficient and independent. It empowers them with basic knowledge of budgeting, investment options, financial markets, and more. 

Discuss needs vs. wants

To let your kids know the value of savings, you will have to let them know the difference between needs and wants. “Needs” include the basics of life such as shelter, food, healthcare, education, and basic clothing. On the other hand, “wants” include everything extra from designer sneakers and the latest devices to movie tickets and bicycles. 

The easiest way to clear this concept is to quiz them on various items in your home. In this way, you can better explain that they have to prioritize what they spend money on while saving some of it for future use.

Talk about why you work

You should discuss with your kids why you work. For children, the concept of money and work is remarkably vague. They may not even have a concept of a job. They just know that you go to work but don’t understand what it means. 

Explain to your kids how you work to make money that is used to pay for everything in your home. When you perform your job well, the company gives you money in exchange.

Chores and allowance

Young kids can start doing household chores in return for an allowance. It is one of the best financial literacy activities for kids as it will help them know the idea of working and earning money through it. 

Choose household chores that are appropriate for your kid’s age. Young kids like piggy banks as they can witness the coins adding up. For older kids and teens, it’s a good idea to use a debit card service to pay them for their jobs.

Saving and sharing

Help your kid learn how to make plans for saving, sharing, and buying. Let them learn to make plans for saving for birthday and holiday presents, sharing with others, and saving for expensive items that you can’t get from one week’s allowance. It will help your kid develop important financial habits for the future. 

The concept of saving arises when the grant is not enough for your kid to buy what they want. Saving the flexible part of the grant for 2 to 3 weeks will be necessary to get that item. Help your kid learn to use saving plans by keeping money in an envelope until enough amount is collected.

Let them make spending decisions

Letting your kids make spending decisions is an important aspect of financial literacy for kids. You probably don’t include your kid in major financial decisions that may influence your family finances. But providing them power over personal spending is a great way to let them learn about money. 

You can also involve your kid through the process of weighing the advantages and disadvantages of a major purchase such as buying a car. Then, let them decide what they want to get from their money and help them go through similar process of comparison. When you allow your kid to make easy choices at a young age, then it will become easy for them to make decisions for themselves as they grow. 

Financial education for kids

Teaching your kids about money management at any stage will not always be easy and take time on your part. But if you want your kids to learn how to manage money as an adult, you will have to take time now to make them financially literate. Financial coaching for kids is important to let them have a solid financial future. Keep in mind that it’s never too early to teach your kids to start forming good financial habits. I hope that these ideas and tips help you start teaching your kids about money. Today’s kids are tomorrow’s smart spenders and investors. Ensure that they have the tools they require to become financially literate. 

To find out more about Financial Wellness Coaching, please book an introductory call with our Financial Wellness Coach who can guide you through the process of finding out your money goals for the future of your family.