Saving money is one of the basic tenets needed to survive in life. Everybody needs to save for the rainy days one way or another.
It’s never too early to learn how to save and spend money wisely. Coming up with creative ideas in teaching kids about money prepares your little ones in facing the uncertainties of the future.
Take the advice of Matt Krantz from USA Today. He said that a 5-year old kid who saves $100 a year earns a 6% average annual return, and will be able to keep it in the next 60 years.
Introduce Credit and Debit Cards
Kids usually get the impression of money as solely pertaining to cash. Explain how credit and debit card payments work to your kids. Take them shopping and let them witness the cashier swipe your card to reflect the amount of money you’ve spent.
Let your kids understand you need to save money to pay the company back for your credit card purchases. Emphasize that your bank account must have sufficient funds to cover for debit card purchases. It does not hurt to impart pertinent technical concepts to your kids as early as possible.
Invest in a College Education
Give your kids practical reasons why they need to invest in education at a young age. It’s best to start teaching children about investing for college before they even reach their teens. You will be amazed to see your kids almost have sufficient money for their education by the time they’re about to graduate from high school. Help your kids attain a milestone in their career by getting a college degree.
Invest in Future Entrepreneurship
It may be too early to prepare your kids to become future adult entrepreneurs. However, it can’t hurt to plan ahead of time. First, tell your kids they need to have a business location. Inspire them to come up with top property investment ideas in the market while incrementally saving their funds for future use. Remember to use simple examples when reminding them that they should be prepared for unexpected industry changes.
Limit Allowance Distribution
If possible, don’t give your kids extra allowance. When the weekly allotted amount of allowance you’ve given runs out, stand by what you told your kids. Give them their next batch of allowance the following week. Doing this will make your kids learn to budget their money wisely, and avoid unnecessary expenses.