Five-year-old Tom wants to buy all the toys in the world, six-year-old John loses interest in new things after 20 minutes, ten-year-old Nancy constantly loses everything, and her mother is afraid to give her money, and seven-year-old Lora does not have the patience to save up for her dreams. Helping your kids learn about money is as easy as playing online slots or cooking a simple meal. Here’s how to tell children about money and teach them how to shop rationally, develop independence.
Tell Your Kids What Money Is and What It Is for
At 5, a child may not understand the value of work or be responsible for family expenses. But it’s time to start explaining what money is and how it works. Start by playing games, reading books, and watching cartoons about money.
Take your child’s age into account and explain in a language he or she understands. At age 10, children can already count, save, store, and understand where the money comes from. At the age of 3, money is paper, and they are given toys for it in the store.
Teach Rational Consumption
A child’s spontaneous desires are dictated by a surge of dopamine, the pleasure hormone of anticipation of a purchase. When the toy is bought, the joy quickly passes. To outsmart the brain, all you have to do is put off the purchase until later. Start a special notebook, stick a picture of the toy and wait a couple of weeks. During this time, a few more things may be added to the list. After two weeks, ask your child to choose one toy from the list and buy it – so he will learn to prioritize, and the joy of the long-awaited purchase will last longer.
Even at this age, you can teach your child about responsibility and environmentally friendly consumption. Tell them that plastic toys are bad for nature and that dolphins, bunnies, and birds suffer. Together, choose unnecessary toys and think about where they can be used: give them away, exchange them, take them to recycle or sell them. Explain that when we do not throw away toys and pass them on to others – they do not pollute the world and continue to be useful. When we sell them, we also give joy to someone and also earn money. Not all toys can be given away and sold, so it is important to treat purchases wisely.
Make a rule: buy new toys only with the money from the sale of old toys. As a rule, to buy one new thing, you need to sell two or three used ones.
From the age of 6, children can be taught to spend money properly and to enjoy useful things. For example, a child can help make a shopping list and make sure it is adhered to in the store – they will feel important to participate, feel proud of themselves, and learn to plan their budget.
If your child can count, write, and read, start keeping records together in Excel or mobile family budget apps.
Create Conditions
Some children at 7 are able to plan and save, some are not. As a rule, self-control is formed by the age of 4, but the skill appears later – when the child repeats one action several times, it forms a habit. Children’s efforts are not enough for a habit to emerge; conditions are needed.
For example, the girl wants roller skates, but she spent all the money on candy. If daddy won’t give in and buy roller skates, the girl will either have to give up her dream or save up – these are the conditions for forming a new habit of saving. If daddy gives in and buys rollerblades, there is no need to try.
Show visually what goal you can get to if you put it off. Print out a picture of candy and roller skates and sign the price and the date when and what he can buy. For example, right now $20 can buy a pound of candy, and if you save up for 6 weeks, you can buy roller skates. It’s up to the child to decide what’s more important, and it’s up to the parent to respect the choice and show resilience.
Allow to Manage Money
Pocket money can be given from the age of 5. Money should be taught gradually. Children need practical experience to learn how to make independent decisions, to spend and save, to plan and distribute the budget.
In cases where you give money to tutors, the child does not learn how to handle finances but acts as a messenger between you and the tutor.
Pocket money doesn’t have to be given in cash. Banks now offer debit cards for children that you can add to your phone and not carry around.
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