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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 a little older
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 Are Some Tips on How to Raise Money-Conscious Children:
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.
Set Spending Limits
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.
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.
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.
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.
Encourage Them to Look for Bargains
At the same time, teach them to try harder and look for better deals. You can even introduce them
to the notion of using coupons. If they learn they can use the money saved to buy something
extra, they will quickly learn that settling for what they find first is not always the best option. If they
are old enough and you let them spend time online, show them services like Discountrue that
focuses on frugal lifestyle. It will do no harm to show them they can buy things cheaper if they
are willing to make an effort.
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 therefore learn how to raise money conscious children. This
will ensure they grow up to be responsible adults with proper financial management skills.
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