If there is one area of life that must be taught to every human, it is the concept of trade and money. It seems that humans are not born with the ability to understand how money works, what it stands for, and how to save it. As parents it is our responsibility to teach the offspring everything we can about the world of money. Rare is the person, who on his or her own, has figured out how trade works and who can then be responsible. Trade (and money) works with fairness and honesty. One person gives a piece of bread, the other person pays with a bit of money. Both people are happy with the transaction and they can do it again tomorrow. This is fair trade and the responsible use of money. However, many people never mature passed the two year old level of development. This is the time when little children see everything as theirs and they want it when they want it. This is the time of selfishness. As children grow, they normally learn to share with others and they learn fairness in dealing with their fellow humans; some don’t.
Following is a list of suggestions that can be useful in teaching children about money and in how to save it.
1) Set a responsible example. Children, like monkeys, mimic what they see. Whatever you do, the children will learn to do it too. If you bounce checks, they will think that that is the way. If you are always fair with your dealings with others, then the children will see that as the way to go.
2) Show the kids what you are doing. Kids are perceptive, but they can’t see into your mind. When you sit down to pay bills, have the whole family in attendance. No matter if your children are very young, it is never too early to start showing them what you do with the money. Allow questions as to what you are doing, and answer honestly. Your attitude towards your financial matters will act as a template for the young minds as they develop.
3) After a year or two of demonstrating fairness and honesty at every turn, give the kids an allowance that they may start experiencing for themselves how to handle money. Teach them to spend the cash for what they want, but also teach them to save a little for later. If you can demonstrate good habits, like saving ten percent off the top of your paycheck, then they can start doing the same thing with their allowance. What we start at an early age we learn well.
4) Demonstrate honesty and fairness at every opportunity. When you go with the family to a restaurant for dinner, explain why it is good to tip the server. If you find money on the street, and you know who dropped it, show the kids that you are duty bound to return it to the person who lost it. Also, demonstrate fairness and honesty for themselves as well as others. This to let them know that others may not be as honest as you are and that evil does exist in the society. You will want them to appreciate having money and to save it. This gives them the idea that money has a certain value.
5) Show them by example that saving money for a future event pays off. After saving for a year, for example, show them that you now have enough money for a vacation. Saving money equals good things for everyone.
6) Obviously, the way to teach kids to learn to save money is by having and demonstrating all the good money habits yourself.