Teaching your child how to handle money is one of the important aspects of education. This financial education starts at a young age. You cannot start early enough to make children aware of the value of money. Important, because you would rather not see your child charged with debts later. On the other hand, it is not the intention to raise your child as a small, because that also does not contribute to optimal self-development.
Teaching your child to handle money prevents financial problems in the future. Of course this is not always a hard guarantee. However, research has shown that children who are made aware of the value of money at a young age are more self-reliant. But how do you approach your child’s financial upbringing properly? In the article below we give you a number of useful tips that you can use during the financial education of your child.
Test your child’s independence by giving pocket money
Pocket money. Who has not grown up with it? This is perhaps one of the first situations in which a child is confronted with the value of money. This is not always about the amount, but more about the underlying idea. By giving pocket money, you test the independence of the child as a parent. A small conversation from parent to child is necessary for this.
Of course you do not expect reciprocity when giving pocket money, because it is not a salary. However, it is important to make it clear to your child what he or she can and may do with the money. In this way you encourage the child’s independent moments of choice. You can also test whether your child understands the value of the money by providing pocket money. Does your child distribute the pocket money over the week, is it saved or suddenly spent?
Learning to deal with money and making mistakes go hand in hand
We learn from our mistakes. Whether that is in daily life, or financially. This also applies to learning how to handle money. No matter how difficult it may be as a parent to watch your child make the wrong purchase, let him or her make the mistake.
Because we are still talking about pocket money, it is often about relatively low amounts and the suffering is often easy to oversee. Your child, on the other hand, will learn from his edition what can prevent major problems in the future. By having your child make mistakes in his or her handling of money, you automatically teach them the value of money and the consequences of a wrong investment.
Teach your child to resist saving and temptations
A child who is susceptible to temptation will have more difficulty controlling financial administration at a later age. As a parent, an important task is hidden here. By making your child aware of the interests of saving, you immediately work on the resilience to all kinds of temptations.
Just think of advertising and commercials on social media and the internet. Does your child really want something? Then you must first save. Work together with your child on the ultimate goal for which he or she is saving. This can be, for example, a toy or another product. Of course you must also regularly look at the saved amount together, so that your child remains motivated to continue saving.
Open a real bank account for your child
There is no better way to show your child the financial world than to open his or her own bank account. This gives your child an excellent insight into the meaning of a bank card, a bank statement or depositing money. Because your child can see up to date and online what he has saved or spent, the sense of responsibility is triggered.
Borrowing money from your child increases his or her responsibility
Is your child old enough? Then it is an excellent idea to occasionally lend an amount to your child. Keep the loan plausible and work with low amounts. After all, it’s about the idea. For example, lend your child money for a T-shirt that he or she wants to buy, or for something else for which he currently has no money available.
Make clear agreements regarding the time periods in which the amount must be repaid to you as a parent. This can be based on the pocket money that your child still has, or by taking a part-time job. In this way you teach your child to deal responsibly with the fulfillment of financial agreements, and you know that there are irrevocable obligations attached to this.