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How to Teach Your Children About Finances, at Any Age

It is important to make children realize that the things that we buy require money. They should not feel that everything that they demand is available to them just like that.

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Updated:July 5, 2017, 8:00 PM IST
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How to Teach Your Children About Finances, at Any Age
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Over the years there has been a tremendous shift in everybody’s lifestyle and material needs. Money can give you freedom and choices but making our children realize the importance of money is very important. We should teach our children how to handle money as early as possible, so that, they can get a head start that we might have missed when we were young. Teaching children about finances can be tricky but the outcome is always rewarding.

Here are 7 tips to teach your children about finances, at any age:

1. Everything that we buy has a cost:

It is important to make children realize that the things that we buy require money. They should not feel that everything that they demand is available to them just like that. Even a 4-year-old knows numbers and what is less and what is more. Help them realize what costs how much, so that they value valuable things.

2. Help your children prioritize things:

Kids should be able to make out the difference between the things that they want and the things that they actually need. It could be a tough decision for the little ones but it would certainly help them learn value for money.

3. Money management:

Whether you have a young child or a teenager, it is equally important for them to learn how to manage their money. A piggy bank or a clear jar can be used to show children how the money grows if they save. Tell the children that if they want to buy one item then they have to save on the other one, which might be insignificant.

4. Open a Bank account:


Opening a simple bank account can be encouraging for the teenagers to save money and manage their account wisely. Banks in India offer Kid’s Savings Account even for 10-year-olds in their name.

5. Shop Smart:

Make your child understand that a same toy can have different price at different stores. Help them choose the one that has the best price.

6. Let your children learn from their mistakes:

Be a guide for your child and not a tyrant. Let him learn from his mistakes because the sooner he learns the better it is for him in the long run.

7. Be a Helping hand:

Teach your child the importance of donating something to those who need it. It can be some old toys, clothes or books etc. Gradually, they will realize that giving not only impacts the people they give to but the giver as well.

Act as an inspiration for your children and always set examples for them. Because what they learn by seeing is much faster than what they learn from hearing. Always bring to their notice your savings when you give a miss on certain things, give up unnecessary desires or bargain with the shopkeeper to get the best price.
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