7 Important money lessons for children

My 3 year daughter demanded  to get money from atm machine to buy her favourite princess doll  in a toys shop. When I refused saying I don’t have  money she shown me atm machine and asked  to get money from this machine. I  tried to  explain  her that for getting money from that machine we have to deposit money in bank but she shown  me queue of people standing in front of ATM and said if this many people can get money from the machine then why can’t I. I was helpless mother trying to explain my child about banks , atm, for 1 hour on the road  but in vein. She insisted by throwing tantrums and finally I have to buy the princess doll for her. My little kid thinks that ATM machine is machine which has money and it gives it to whoever goes to it. And That’s when I started money  lessons /education  to her.

I  used some step by step ways to explain  money  and  its importance. Initially I found it difficult , as from where to start  and  how to  teach her. As money  comes with so many things savings ,banks, loans, hard work ,own money, from where it comes and where it goes. There might be number of questions from your little one. But  it’s not  that difficult as it sounds as children are very smart and they learn  very fast. If they get money lessons by using it in day-to-day life they will understand about it. And this money education will  be perfect start of their  mathematics base  lessons automatically .

Managing money is very essential  and if  children learn it  from young age  they  will use it wisely once they grow up.  

1. Educate about money

Start  from money counting lessons  first. Give some coins  and then  notes for counting .Children will  not only  learn counting  but  values of coins and notes from it. And then explain  how money is used to buy things and  from where money comes ? How money can be earned and then spent.
Tell them how things can be bought before 10 years with same money and how many things can be bought now with same money.  Include money saving, managing and  borrowing money  lessons  in it  slowly. With growing age elaborate  more  topics about money. For older children ask to  keep track of   their daily spending. Make a note book and note down all their  expenses in it to know how money gets spend .By  knowing own expenditure child will try to save money.

2.Money saving habit

From  young  age  develop  a  habit  of  saving  money by  giving a piggy bank. Give coins for depositing in piggy bank . And use that saved money for buying things like note books  ,colors for children . Piggy bank  is  smaller version of bank .By using piggy banks  children  will learn to save money . Take them to buy things when they are on discounts /sale. Explain children  importance of sales in malls and how shopping only in sales/discounts can  help to  get more stuff using same amount of money. These practices will make your children financially smarter .

3.Visit bank along with children

Take your child along with you to the bank and perform all transactions in front of him/ her. Explain about banks and how money is saved ,borrowed , withdrawn from it. Also valuables like gold can be kept safe in this place.

If possible open minors account for children older than 7 years and  let  them learn deposit and withdrawal of money in it. By  doing  transactions on own  children  will  learn managing money from young age.

4.Involve children in family insurance planning

No i 'm not asking to teach rocket science to your child but its just insurance policies and believe me it' now that hard and weird as it sounds. But its quite easy and once children know about it they will remind you to pay your next premium without fail.  Explicate your child  about insurance policies and how important it is to have this policies for secure  future.

What is insurance and how to have one. How money helps  to  live life and insurance is  its different form. Children will know about saving , future ,insurance  and it significance by this lesson.

5.Earn own  money

Ask children to earn own money. Its been said people value hard earned own money. For that arrange events like  Food stalls ( anand  nagari)  on the  occasions  of  celebrations ,  festivals  in your society .Set small food stall for your child and ask to sale them. You can give helping hand by  cooking  food  or  making  hand made greeting cards, paintings to sale  in these stalls. In this way children will learn to earn their  own money  and importance of hard work. Children will value hard earned money  from this  events  and  they will learn to spend it wisely if they are properly educated about using it from young age .

6.Shopping of  grocery ,books

Ask children to do shopping on their own. You may accompany them to super market ,but let them do everything on their own. Hand over list of  things to buy and required money. Ask them to select these things from shop weight them ,and handover exact amount to cashier. Show  them how to  bargain  at local vendors shops to get good deals. It will help them to calculate and give money.

7.Money games

There are many types of money games available  in the market. These money games are interesting ways to start  building financial habits for children.  Involve children in playing  these money games. They  will  know how to buy and sell things , How to do transactions using money. Let children play  traditional  games  like  business boards  and learn  business  while having fun .