Fun ways to teach kids about personal finance
One of our biggest responsibilities as parents is to arm our children with the tools they will need to be successful adults. One of the often-neglected areas is personal finance. It is difficult for adults to come up with fun ways to teach kids about personal finance, until now!
How can we possibly make concepts like saving money palatable and understandable to youth? How do we make them understand that we have to work hard to earn the money we use to support them?
One of the biggest pieces of advice when it comes to teaching kids about finances, is that the sooner you start the better the outcome will likely be. It is much easier to start promoting financial literacy to a child than it is to a teenager.
Teach the value of money through allowance
A great way to help illustrate the concept of money valuation and the importance of saving, is to give a child allowance and help them use that to meet a financial goal.
Say for example, that your child wants a new video game console. Giving the child allowance for the completion of certain tasks, and helping them understand the need to save that money until there is enough to get what they want is a powerful teaching tool. They remember the labor they put into earning the money and how long it took to accumulate what they needed.
This will help them understand that they have to expend effort to earn money, and that things they want cannot be immediately purchased – they must save up first. It makes it easier to keep a child’s understanding of how money works in the realm of reality.
It also helps to prepare the child for the future where what they are saving for (i.e. a car) is a much bigger investment than things they wanted as children. They will have to make long-term goals in order to get what they want, and allowance and goal setting will give them these skills, which will help them in the short- and long-term.
Finance-related simulation games
Games can actually be helpful at teaching your children about finance, and they will never know they are learning as well as playing. There are tons of different simulation games where the object is to successfully manage a city, a store, an enterprise, etc, by managing taxes, expenditures, and more. While this may just seem like fun, it requires the player to evaluate their financial situation and learn to manage it effectively to keep themselves from operating at a loss in the game.
There are even specially-designed personal finance-related games that are suitable for much younger children than more complicated simulation games. Check out the internet and see what you find!
As parents, we need to ensure that we teach our children the skills they need to successfully navigate their world as adults. In addition to basic skills on how to care for oneself, personal finance is also an area that they need an in depth understanding of. Finding fun ways to teach kids about personal finance will help set them up for future life success and a healthy relationship with money – these are invaluable skills to have, and your kids will be thanking you when they realise what you’ve done for them.
If however, you yourself need a little help in the finance department, whether it be accounting and bookkeeping, taxation, or financial business services, the team at IQ Accountants can help. These are our specialised areas of expertise. Call us today on 5576 0011 and let’s discuss how we can help you!