There’s an old saying, “Money can’t buy happiness”, Although it’s true, as money is not everything and it’s hard to define happiness. But not having money will make life unhappy and miserable. We have always heard that the single path to success and happiness is going to school, getting good marks, joining a good college or university, graduating and getting a job, getting promoted, buying a car and home and someday you will find happiness. The basis of all these things is money, then why are we not taught about the importance of money management?
Money is like the oil in the engine of our daily life, without it, everything comes to a complete stop. We need money for our basic requirements such as food, housing, and clothing, and also for wants and desires like travel, entertainment, and luxuries. We feel secure and stable when we have money, and it also enables us to make plans.
We always worry about how to earn money. Instead, we should focus more on money management and teaching money management skills to kids. To teach them about money management you need not wait until they graduate or earn, because studies reveal that children who learn managing finances at an early age are more likely to have better financial habits as adults. According to a study by the University of Cambridge, children who were taught about managing finances were more likely to save money, pay off credit cards and loans completely, and have a good retirement account.
Importance of money management for kids:
Finances for students are very important irrespective of their career choices. As Warren Buffett said, “Sometimes parents wait until their kids are in their teenage years to talk about money management, when they could be starting when their kids are in preschool”.
For kids when they think of money, it’s all about spending money in buying things that excite them. You should make your kid understand that money is not always about swiping the card, but it takes lots of hard work to earn money.
Financial Success:
Early exposure to money management skills is crucial for children’s future financial success because it develops appropriate spending habits that protect them from debt and other financial problems.
Independence:
Through the acquisition of money management proficiency, children acquire a heightened sense of independence and reliance on themselves. They become adept at budgeting, spending, and saving, allowing them to make informed decisions regarding their fiscal habits.
Entrepreneurial abilities:
The acquisition of effective money management skills not only instills financial responsibility in children but also nurtures their entrepreneurial abilities. They acquire the knowledge necessary to convert their creative ideas into profitable ventures while ensuring that they are proficient in managing finances.
Avoids financial stress:
Children who are taught money management skills might avoid experiencing financial stress, which is bad for both their physical and mental health. They learn how to operate within their budget and reduce anxiety-inducing economic pressure by using effective financial management practices.
Critical thinking:
Finances for students develop critical thinking skills as they examine their spending and saving habits, enabling them to assess the pros and cons of financial choices and arrive at sound judgments. They will behave as responsible consumers as they are aware of the worth of money. They will think twice before spending on a product and make wise financial decisions.
Prepares one for adulthood:
By teaching children money management skills, parents equip them with the necessary tools to handle their finances and make informed decisions that can have significant impacts on their financial stability in adult life.
Saving habits:
A child is more likely to develop good saving habits if they understand the value of money. They will understand the importance of saving for the future and the fact that money is an invaluable asset.
Academic Success:
Managing finances will also help children in their academic success. According to research by the University of Wisconsin, high school students who got money management skills had higher GPAs and were more likely to complete their undergraduate degrees.
Interesting Ways to Teach Your Child the Value of Money:
- Give your kids a fixed amount of money or allowance to spend each week or month to show them how to manage money.
- Set up a jar or piggy bank in which your kid can save money. Encourage kids to save a certain amount of their allowance or pocket money.
- Make your child understand the difference between things they need and things they want. This leads to better spending decisions.
- Take your child grocery shopping with you and teach them how to compare the prices and find the best offers. This will help them understand the value of money.
- Encourage your child to sell the small items they no longer need. You can even help your kids and their buddies to set up a small shop in the lawn or garden for this. This teaches kids about money and the value of hard work and also instils entrepreneurial abilities.
- Board games such as Monopoly and card games such as Cashflow for Kids can be effective instruments for educating kids about money management and finance for students.
- Encourage your kid to donate some amount of their allowance to charity or to help someone in need. This teaches kids the importance of generosity and giving back.
- Financial literacy in young children might benefit from early exposure to money management. Offering kids, the chance to count and sort coins and bills creates an environment where they can start to understand the value of money and ultimately feel secure using it.
- Encourage your kid to save for their favourite toy or a trip to a theme park. This way they will learn the importance of saving over time.
Also Read: How Parent Engagement Leads to Student Success
Kids learn from their parents, so be a role model to your kids. Sit with them and discuss their spending, and make a budget for your kids. Set a positive example for your child by developing good financial techniques. You could even open a bank account for your kid at a proper age to enhance their sense of progress and financial responsibility.Visit EuroSchool to know more.
