As kids begin to get comfortable asking for everything they ever wanted, at the back of most parents’ minds lurks a deep concern. This can become a big problem later on if the kids can’t realize the value of money. There can be many approaches in teaching, but as a parent, you don’t want to come off negatively and have the message misunderstood.
Depriving the kids of what they want each time they ask may develop hidden issues as they become more independent and grow to become adults. It will never be too early to teach them when and what to spend the money on and how to save the excess. You can very much start with the ABCs of family finance.
Family Finance’s ABC:
- A: Adding up
‘Adding up’ means putting up an action plan to save money. Set up specific money goals and illustrate ‘cash flow’ in very simple visual aids. The more they see the basic math involved, the more they can get the bigger picture. Emphasize that any addition represents money going into the savings and the subtraction as the opposite.
- B: Bank account
Young as they may be, some banks offer options to open an account for kids. You may have to put up the capital first and formulate ways to enrich the amount.
- C: Cash
Having cash on hand is much more encouraging to save compared to having a credit card. Activities like shopping for groceries can really show your kids the physical side of money transactions.