Financial literacy is an extremely important skill of an adult, so it is necessary to develop it in children. Young children may think that money is taken from ATMs freely and in any quantity. It is necessary to instill in a child from an early age a correct understanding of money and its role in human life. We teach a child to handle money.
First of all, the child must realize the value of money. Money plays an important role in people’s lives and needs to be earned. Money is not given to a person just like that, so their importance should not be underestimated.
At the age of 5-6, the child already has sufficient cognitive skills to distinguish denominations and coins by denomination, count the deposit and calculate whether he has enough money to buy a certain thing.
Consider a few ways to teach a child how to handle money.
Teach your child the basics of math
When the child goes to school and learns to perform the simplest arithmetic operations, explain to him the value of money and encourage him to apply the knowledge in practice. For example, at home you can teach a child to exchange pennies for bills.
You can also entrust the child with any housework and give her a symbolic monetary reward. Psychologists do not have an unequivocal opinion on this issue. Some believe that this decision is wrong and children should help their parents for free. Others advocate financial incentives, believing that it will teach the child to be frugal with finances. Parents must decide for themselves whether this method of motivation is acceptable in their family.
Young children learn something new in a playful way. At home, you can play with the child in the store: stick price tags on various items in the house, then give the child a small bill (you can use real money or money from the “Monopoly”) and offer to choose items for this amount.
In addition, when the child grows up a little, play board games with her like “Monopoly“. This will help the child gradually understand the value of money and develop basic skills in handling money.
Give the child a money box
Put a few small bills in the money box and ask the child to put money in it. This will teach her a responsible attitude to money. Also teach your child to keep track of money. This can be done on a real example (when you give your child a small amount of money) or during games.
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Arrange a tour of the child to the bank
When the child grows up, take him with you to the bank and briefly tell about the banking system. You can explain to a small child that a bank is something like a big money box: you can keep money in it until you need it.
Explain to the child what a bank account is, tell him that the account can be replenished or withdrawn from it. If you withdraw money from your account, it will be empty until you are paid at work or until you replenish it yourself. The child must understand that you can’t just buy everything she wants, and that she should be responsible for buying goods, choosing only those that she really needs.
You can even open a small account in the name of the child – it will motivate him to save more and teach him to understand the importance of money.
Give the child small amounts for out-of-pocket expenses
The amount you give your child should be small, but enough to buy small items or sweets. When you take your child to the supermarket, tell her to take her money in case she wants to buy something for herself.
If your child has spent all their pocket money, but asks you to buy her ice cream, tell her that she needs to wait until the end of the week when you give her pocket money again. If you give up and buy your child ice cream, he is unlikely to understand the need to be careful with money.
If a child wants something for which he or she does not have enough pocket money, even if he or she will save (for example, a book or a toy), help him or her calculate how much he or she needs to save from pocket money each week to buy what he or she wants. Then remind her to put the required amount in the treasury.
Also encourage your child to spend their money not only on themselves. Ask her to donate some of her pocket money to charity.
Allow your child to spend pocket money on themselves
When a child wants to buy something in the supermarket, help him to calculate the right amount. Let her pay the cashier herself. Tell your child that sometimes you can buy goods at a discount, but you need to wait a while. However, if you think that the thing the child wants to buy is not entirely appropriate or may harm it, you can insist that the child does not spend money.
Follow these tips, because with their help you will be able to explain to the child the value and importance of money, as well as teach him to manage money wisely.