Beyond The Lemonade Stand: A Child's First Lesson in FinanceBeyond The Lemonade Stand: A Child's First Lesson in Finance
Financial literacy for kids
Most kids start out with common financial experiences such as building their own lemonade or cupcake stand and trying to sell them to people on the sidewalk. While this has been a popular way for little ones to earn money when they are starting out in the financial world, it isn't something they can do every day or weekend. There are numerous ways that you can teach your child about finance and money, and children can learn the basics at a very young age with household chores. Here are some smart ways to help your child understand how the world of money and financial gain works.
Teaching Kids How to Save
Kids pretty much believe you have endless dollars in your wallet and bank when they are little ones. That is why you hear phrases such as 'I want it Daddy' and 'we can afford it Mommy.' Teach your little one to save by giving them a piggy bank or jar to put their change in. Let them know that if they save the money that they make by doing chores and helping at home, they can buy something they need or want. Avoid buying them the item they are 'just dying to have' and let them start putting their change away for it. This is how you will create a savvy investor out of your little one!
Borrowing Means You Give it Back
This is the perfect opportunity to teach your child about credit at an early age. Give your child a dollar for a candy or something they want to get, but say that they must give it back to you in some shape or form. Obviously if your little one had money stashed away, they wouldn't be asking you for money. Ask them to do something for you instead such as clean the table or put their toys away early. This is a great way for children to learn responsibility at a young age.
You Aren't Always Paid for Hard Work
This one will come handy down the road when your child comes running to you after volunteering or helping other people by chipping in and asks you why they weren't paid anything at the end of the day. Sometimes we have to work hard and don't always get the reward of money for it. (Think salary jobs that can make you work endless hours and you don't see the extra pay)
We don't get paid for everything we do in life, but sometimes the rewards are much more fulfilling. Ask them how they feel after helping others. I am sure that when they remember how happy they made others in need feel that they will enjoy that feeling more than any dollar.
What type of basic finance lessons have you taught your little ones? Please share with us!