10 Steps To Help Children Learn About Money Management - Expert's Tips

It's important to understand the value of money and have a basic idea about money management from a young age. Anita Madan, Head of Curriculum Development, EuroKids, tells us how.

Initiating financial education at a young age is crucial as it builds a solid foundation for understanding money. Introducing simple lessons in saving and spending in ways that resonate with their age group, lays the groundwork for more complex financial concepts later on. For instance, introducing the concept of saving by using a piggy bank to collect spare change can be a fun and tangible way for young children to understand the value of money.

Help kids understand the difference between essentials and non-essentials by illustrating everyday situations. Explain to them that while food and clothing are needs, toys and gadgets are wants. This can be reinforced by involving children in shopping trips and discussing choices made based on priorities. 

The three S's of money - saving, sharing, and spending - provide a comprehensive framework for financial education. Discuss the importance of saving for future goals, the joy of sharing with others in need, and the responsibility of spending wisely. Consider setting up three jars labelled "Save," "Share," and "Spend." When children receive their allowance, they can allocate a portion to each jar, helping them develop a well-rounded understanding of their financial choices. 

Introducing a weekly or monthly allowance system not only teaches budgeting and decision-making but also provides an opportunity for practical application. Encourage kids to allocate their allowance to different categories, instilling a sense of responsibility for managing their resources from an early age.

Encouraging kids to set financial goals as it instils the values of patience and discipline. If a child wants a new video game, help them calculate how much they need to save each week. This goal-oriented approach provides a tangible way for children to understand the rewards of financial planning and delayed gratification.

Emphasise that mistakes are opportunities to learn about money management. Share personal stories, such as a time when an impulse purchase led to a valuable lesson about budgeting. This helps children understand that everyone, including adults, learns through trial and error.

Parents play a pivotal role in shaping their children's financial attitudes. Engage in age-appropriate discussions about budgeting, saving, and responsible spending.

Incorporate fun games and activities to make learning about money engaging. Interactive online tools or board games like "Monopoly" can teach children about financial concepts such as budgeting, investing, and the consequences of financial decisions in an interactive and enjoyable way.

Use a clear jar to help kids visualise the growth of their savings over time, reinforcing the connection between consistent saving habits and achieving financial goals.

Teach kids that with money comes responsibility, like taking care of their possessions. Help them understand the value of hard work, and making informed choices that contribute to a responsible and fulfilling life.