Managing money is a skill that everyone needs to learn. With the economy being an ever-changing jungle, money management is essential to surviving and thriving in life. If you learn how to properly handle money at a young age, it sets a strong foundation for the rest of your life. Let’s take a look at different ways to introduce youth to finance as listed in an article by Dave Ramsey.
You can teach children about money management at ages as early as kindergarten and even pre-school. One good way to introduce young children to money handling is to use a clear jar. With a clear jar, kids are able to watch their money grow every time they add to it. It gives them something to look forward to and acquaints them with the topic of saving. Next, set healthy examples for children that they will grow to eventually follow. Try not to argue about money in front of them, and overusing credit cards on frivolous purchases. Also, show children that things really do cost money. This can be done by helping them take a few dollars out of their jar, going to the store and having them hand money to the cashier to make a purchase. By doing this, kids began to understand that not everything is free.
With elementary and middle schoolers, you can start to do things such as showing them opportunity costs. Let them know that by buying a certain video game, that means they won’t have enough money for a new pair of shoes and other similar comparisons. Another way to stress the symbolism of having money is by giving commissions instead of allowances. Paying kids for doing certain chores or helpful activities shows them that money is something that is earned and not just given. Also, teach children to avoid impulse buys. Encouraging them to wait at least a day before buying something they really want stresses the importance of making smart, thought out choices when it comes to using their money.
Teenagers definitely need the most structure when it comes to learning about money, because very soon they will be making financial decisions for their adult life. The teenage years are a great time for them to gain the responsibility of having their own bank account. This way they will be able to monitor their purchases and track their account’s fluctuation. Also, teach kids the dangers of credit cards and to steer clear of student loans. Debt avoidance is key to a healthy financial situation and people should be aware of that as early as possible. Lastly, introduce your teens to budgeting. This way, they will be in control of their spending and can practice self-discipline in their financial decisions.