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How To Raise Money Conscious Kids

Every parent knows how hard and time consuming it is to raise kids. Getting toddlers to perform very basic tasks can be a nightmare. Every day brings a never ending battle to get children to finish their food, pick up their toys, or keep the noise levels down. In the midst of all this, teaching kids about money takes a distant back seat in most homes.

Many parents never even try to teach their kids about money.  This is because managing money is tough enough for most adults, most of whom have to learn the hard way. However, there are simple ways to get kids to understand the value of money from a young age.

Here tips on how to raise money-conscious kids.

Explain Money

It is easy to assume that kids understand money, but they actually do not. Parents should explain what money is, where it comes from, and where it goes when you spend it. This will give them a basic insight into the money cycle, and how it constantly comes and goes. You should also talk openly about money in front of the children, without necessarily scaring them with complex financial difficulties.S

Set Spending Limits

Kids can be forgiven for thinking their parents have all the money in the world. This is because parents never set limits when buying toys or other items for children. Tell your kids that they can only spend a certain amount in a set period, e.g. monthly or weekly. When they ask for anything, check the price and inform them when it is over the limit. Never adjust this limit to please kids, especially when they throw tantrums at the supermarket.R

Reduce the Frequency of Purchases

Kids who see their parents spend money frequently tend to assume its supply is endless. Get your kids used to shopping once a week, or a few times a month. Explain that this is aimed at saving money, or waiting for the next paycheck. This teaches kids that money is limited, and buying choices must be carefully considered since the next purchase is weeks away. G

Give them an allowance

Some parents may be opposed to this. However, an allowance is the only way kids can experience firsthand the folly of spending all their savings. It also teaches them to manage their own expenditure, and budget wisely. T

Teach them to save

This is part of teaching kids the importance of delayed gratification. The best way to do this is to buy them a savings jar, where they can watch their savings grow. Match their savings to encourage them to reduce spending. Kids who learn to save will be reluctant to spend it all. This is because they feel the pinch of waiting for their savings to grow.

Teach them to respect property

Kids can learn to value money if they respect their property and those of others. Take away their toys if they misuse or damage them. This will make them value every purchase you make for them. With time, they will make the connection between the value of money and that of property.

Be a good example

Children learn behaviors from their parents. This applies to money management as well. Do not splash money when the kids are watching. This will only encourage them to spend money unwisely. Show them how reluctant you are to borrow or let debts accumulate. Let them see your frugality, and they shall learn to respect money too.

The current economic downturn is a great opportunity to teach kids that money actually does not grow on trees. Every parent should learn how to raise money conscious kids. This will ensure they grow up to be responsible adults with proper financial management skills. 

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