6 Techniques to Educate your Children About Money
Children can benefit from finance education at an early age. A study from the University of Cambridge “Habit Formation and Learning in Young Children“, found that money habits are formed by the age of 7. Researchers believe it is important to start basic finance education by age 3. Children pick up money habits quickly, so giving them the right direction is crucial.
1. Start with basic currency literacy
A study from Yale University found that children can recognise and remember coins by the age of 3.
Educate your children about the different coins and monetary notes.
Consider teaching them about foreign currencies when holidaying abroad. This will expand their minds and help them learn more about the countries that you are visiting.
2. Create money jars
Money jars are a fun and easy way to educate your child.
You can create three types of money jars. You can create jars for spending, saving and giving. This will cover the basic lessons of understanding how to use money. You can use the jars to separate money after birthday gifts or pocket money payments. Children will learn how to save for the future.
The giving jar can be used for charity donations. Children will learn about giving and understand how they can help others with their money. They may wish to donate their money to a local animal charity or food bank.
3. Use Coupons or Discount Codes
Coupons can provide an important lesson on saving. According to the Children’s Financial Network, “Children as young as 5 can benefit from learning how to use coupons in a supermarket.” They will see how to save money and make wiser shopping decisions.
4. Set a Money Goal
Children can set a money goal to purchase a new toy or another item. Money goals teach children financial patience and it also provides a lesson on how to save money. It is important to set realistic goals so children remained motivated to stay on a savings plan. If the toy is too expensive it can take a while to reach their goals and they may not stay interested. Picking smaller and less expensive targets is better.
5. Go Shopping
Let your children use their spend jars at the shops to make purchases. Shopping provides an easy lesson setting. How will they spend their money? Will they use their entire jars in one shop or will they spread it out over many shopping trips? An outing to a local toy shop can give you the chance to discuss comparison shopping. Point out different prices on similar items and teach your children about finding inexpensive options. Evaluate the results of the shopping trip will help them understand their choices. How will they restock their spend jars
6. Attend car boot sales or sell unwanted toys online
Car boot sales offer another way to educate children about finances. They can help clean out your children’s bedrooms and teach them about money at the same time. Ask your children if they want to participate in the sale by selling their old toys and clothes. Help them choose items they no longer use and find appropriate prices for them. They can use the experience to refill their money jars. Older children can help sell items at the sale. They can keep track of change and watch customers.
Finance education can begin before your children are in school. They need to understand basic money rules and form the right habits.