Teaching children about money is important because it helps them understand how to use money as they grow up. In this blog post, we will look at seven money lessons that will teach your kids how to earn, save, and spend money responsibly. Our goal is to make the topic of money enjoyable for children as we impart wisdom to them today so they can make good decisions with their finances tomorrow.

Lesson 1: The Value of Money

Money isn’t simply given; it’s earned through work and effort. You can teach your children this by assigning them tasks at home like cleaning up toys or helping in the garden. When they complete these tasks, you can reward them with an amount of money as their “earnings”. A way of acknowledging their efforts. It’s not about giving them money to do chores, but you could do this sometimes to let them understand how earning money works.

Through these activities, children gradually understand that money comes from dedication and labor rather than being handed out.

Lesson 2: Budgeting

Budgeting is about planning how to allocate your money before spending it. It’s a method to ensure that you have funds for expenses. Let’s simplify this concept for kids. Imagine you earn some money by completing chores. Budgeting can be thought of as deciding how much of that money you will save, how much you will spend, or how much you will give out.

For example, if you have $10 in hand you may choose to save $3 spend $6 on something and donate $1 to help others. This approach prevents you from spending all your money at once.

Lesson 3: Planning for the Future

Saving money involves setting aside a portion of it and not spending it all at once.

Imagine this scenario; when you receive some money it’s not advisable to spend every penny on toys or candy. Instead, it’s wise to set aside a portion of the money in a place like a piggy bank or a special savings jar. This way you can start building up your savings for something in the future like buying a bicycle or getting that video game you’ve been longing for.

By saving your money you ensure its security until you have a purpose for it. As time goes by, you can gradually increase your savings. This practice is beneficial because there will be occasions when we desire or need things that surpass our resources. By saving money over time, you’ll eventually have enough to afford those items. Saving also instills in us the values of patience and thoughtful consideration before spending our earned money.

Lesson 4: The Art of Wise Spending

Wise spending involves contemplation before making purchases. Whenever you feel inclined to buy something, take a moment. Ask yourself; “Is this truly necessary? Will I make use of it?” Sometimes we’re tempted to purchase things simply because they seem fun or cool even if they aren’t essential.

Making spending choices allows you to invest in things that truly bring value and ensure that your money is not wasted.

Lesson 5: Debt

Debt occurs when we borrow money from someone and are obligated to pay it back with interest (or no interest). Let’s say you bought a toy but didn’t have money for it, so a friend lent you some funds. Now you owe your friend that amount. If your friend asks for more than what was borrowed that additional sum can be considered as interest.

Dealing with debt can be tricky because if we keep borrowing without repaying the amount we owe, the debt keeps getting bigger. It’s important to always spend within our means to avoid falling into the trap of credit card debt. While it’s okay to borrow, it’s essential to make sure you can repay it without any difficulties.

Lesson 6: Giving and Generosity

Giving and being generous means sharing your resources whether it’s money or belongings, with those in need. It’s similar to when you share your toys or snacks with your friends. 

Engaging in acts of giving is a compassionate deed that benefits others. It provides assistance to the needy and it contributes to making the world a better place. This act encourages thinking about the well-being of others rather than focusing on oneself.

Lesson 7: Investing

Investing is like planting a seed and observing its growth over time.

When you choose to invest your money you are essentially putting it into something, with the expectation that its value will increase over time. This could be starting a business or having a savings account that has growth potential.

It’s important to understand that investing carries some level of risk which means there is no guarantee that you will recover all the money you initially put in. That’s why investing is often associated with adults. However, grasping this concept now will help you understand how money can work for you in the future.

Conclusion

Teaching kids about the concept of money is very important, so they have some understanding before they start making money mistakes. However, if as a parent, you’re deep in debt, it may be hard for you to instill the proper financial education in your kids. But here’s what you can do. You can speak with one of our debt experts at EmpireOne Credit to see how you can reduce your debt and get rid of it for good. Your debt can be reduced by up to 80%, and interest will stop immediately. Call us at (416) 900-2324 to schedule a free consultation with us. Being debt-free feels good!