Money Matters: Teach Your Kids Financial Life Skills

Are you planning to guide and teach your kids with handling and spending their money? I know you’ve witness how generous people are to your kids in the past years and this holiday season that you might be thinking on how you can help your kids learn to value their money, save and wisely spend them.

Let’s check out some tips I have learned as a parent over the past years.

Teach your kids the difference between needs and wants

Start this early on in their life. You may teach them the difference between their needs and wants through play. This will be fun and educational all at the same time. It’s also one best way to spend quality time with your kids.

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If your kids are already enrolled in a toddler or nursery school, they most probably have already been taught about our basic needs – food, shelter, clothing, air and water. An activity of separating these basic needs from other things using stickers or toys would be fun at this stage. You can also use a timer for them to find and separate things in baskets and them compare and discuss each item in their baskets. Just remember that at this stage of your kids’ life, you may want to use your values so you can better help them.

As we all know, if you have teens and young adults like me, these “basic” needs are just the physical ones, there’s a lot more included in our “basic” needs – yes, including us adults. Our needs grow as we get older. We may have come across Maslow’s hierarchy of needs. These includes the physiological needs, social, belongingness and love need, esteem and the self-actualization needs.

So, for teens, we may want to get and provide them a board where they can pin their needs on the right side and wants on the left. Another option is to gift them with a journal or planner to guide them. Though it may be hard for older kids, financial discipline has to be instilled.

It is important to know your Budget

You can always be an example to your kids when it comes to budgeting. Since they already are aware of their needs and wants, tag them along when preparing your weekly or monthly budget. It would be fun too if you can both make a list of items before grocery shopping and help each other out in arranging them according to their purposes and cross out the ones that aren’t necessary or out of the budget you have set.

Take your kids with you in shopping and guide them in sticking to what’s on your list. This activity can be done consistently until you have instilled in them a valuable life skill they could pass along to others or to their future kids as well.

Once they’ve mastered sticking to the budget, they sure will succeed in doing the same thing independently. So, during the holiday season where they can easily earn few hundreds from generous people around you, they can go grab their pen and journal to total their earnings and set aside the amount for their wants, needs and future plans as well.

Plan and set a timeline

Since your kids has already learned to stick to their budget, it’ll now be easy for you to just remind them. And then teach about planning. This is setting a timeline and finding ways on how your child can achieve a bigger “want” that may also come to be a need in the future.

If you share with them your own list of wants and needs and discuss each, your kids will understand how things may change over a period of time, thus planning for the future is highly important.

Be an Example and Make wise decisions

We mentioned an activity early on that you can make a list and compare it with your kids, right? As you compare and discuss each item on your own list as an adult and a parent, you are already setting an example to your child.

Again, your values come first as this is something you are imparting or passing along. You teach your kids your own or your family values.

Another good example to discuss for your kids to easily understand money matters is the pandemic that we are still in. A lot of us weren’t ready – emotionally, psychologically and financially. You see, some negative thoughts and things come as blessings in disguise too. We just got to be observant and make wise decisions so we can make use of them to our advantage. That’s another important skill you can teach your kids.

Remember that your child has a need for inclusion – this is basic within a family. So, include them in decision making by getting their point of view and discuss the pros and cons until you come up with a wise decision as a family.