Teach children fiscal responsibility

Money management is a significant skill that comes with age and maturity. Like knowledge, fiscal responsibility comes only with constant practice and wise thinking. Children don’t value money because they are not loaded with overwhelming responsibilities, but once the kid turns six, it’s time that you start teaching your child how to manage money. Most of us learn our fiscal responsibility retroactively and our experience should be fed to the children from early stages of their life. Money management involves two aspects; saving and spending, the former is crucial for a better future whilst the latter is crucial for the present as well as the future.

Irrespective of your income, answer these questions to yourself; are you managing money well? Are you able to provide a home environment that is financially stable? Yes? No? This might be confusing to you as well. But, these basic questions are important for financial stability. Mirthfully, many kids think that their parents get money from ‘money stores’ that give away money for free.
Many parents have the habit of buying everything that their kids ask because they want to give the best to their children. This is wrong! You are encouraging your children by spending lavishly in front of them. Simply put, you are setting yourself as a bad example. Don’t buy everything that your kids want. If you want to do so, give them small jobs so that they understand how difficult it is to earn money. With the money they earned, they can buy what they wanted.
Offering your kids allowance makes them more responsible. Teach them to save certain percentage of the money. Open savings account in a bank to encourage them to save. Make them understand how important long-term savings are. Give good examples that are appropriate to their age so that they understand better.
Tell them money doesn’t come from trees or stores. Tell them why they are paid; because they did their chores properly and helped around the house. Tell them mom and dad doesn’t have the money to give and that they can earn only by doing their chores.
For children who are very small, get them a piggy bank. If they are so small that even household work is not appropriate to them, give them pocket-money, offer allowance for keeping their room clean and tidy. Ask them to put the money into the piggy bank so that they’ll have lots of money when they are big.
No matter what, don’t tell about your personal situation till the kid enters his teen. As already said, don’t be bad examples. Once your kid grows and enters his teen, involve him in the financial matters of the house, this way they’ll learn practically how financial planning works. Teach them to keep an account of every penny they spend. It is important because unnecessary expenses can be cut down the next month.
You can also explain to your kid about the other kids from poor families who don’t have basic necessities like food, clothing, toys, etc. Ask them to donate a decent amount to those kids from their monthly savings.