Money is a tricky and tough subject. Money is often regarded as a taboo subject, especially when it comes to small children. However, it is important to start teaching financial lessons to children from a tender age. So, how can you teach financial lessons to your little ones without getting them stressed? Well, if you really want to know the answer to this question, then read along the concerns of this article.
Financial lessons you can teach your toddlers
It can be easily said that money management is almost like reading. You can't obviously expect that your toddler will read all his/her textbooks and storybooks without knowing the basic alphabets. Likewise, you can't expect that your adorable little ones will be able to manage money without reaching a specific age. However, you need to start teaching small money lessons to your children from an early age so that they can be on the right path to financial literacy even before kindergarten.
Check out some money lessons you can teach your toddlers and help them to walk on the road to financial literacy.
1. Budgets are an essential part of life: Believe it or not, toddlers can understand the concept of budgeting quite well. You just need to teach this concept through practical examples. For instance, your toddler must be getting loads of gifts and a considerable amount of money on his/her birthday party. Ask your toddler to allocate the money into 3 main categories saving, spending and sharing.
Explain to your toddler that he/she can spend a portion of the money to buy something. He/she can use the remaining portion to buy his favorite toy later. He/she will have to save money till that time. This will help your toddler understand the basic concept of saving.
The concept of sharing is also quite easy to understand. Ask your toddler to share a fraction of the money with his/her sibling. Your toddler may not accept your proposal instantly. However, when you explain the importance of sharing to your toddler, he/she will understand your point and agree to donate money.
2. t is not a crime to make errors: Mistakes are bound to happen and disappointments are inevitable. As a doting parent, you would never want your kid to be sad or dejected. Don't let your heart become weak when your toddler is sad after making a mistake. Rather, explain to him/her that everybody makes mistakes, but it is important to learn lessons from them.
If your toddler starts crying just because he/she doesn't have sufficient money to buy his/her favorite video game because of overspending, then stop putting your hand inside your wallet instantly. Let your kid cry for a little while, but at least he/she will understand the value of budgeting. You can of course pull out a stash of cash from your wallet and buy his/her favorite toy. However, this won't be good for him/her in the long run. His mom or dad won't always be there to solve the financial problems. Your toddler needs to understand this fact as soon as possible.
3. Needs and wants are not similar things: Well, this is little tough considering most adults don't understand the difference between needs and wants. However, you can teach this concept through a game.
For instance, you can ask your toddler to make a list of things that he/she wants and needs. You can talk about your own wants to them to make them understand the concept. For instance, you can share your dream of visiting Sydney one day. You can share tips to fulfill your dreams one fine day.
Your child will want to have many things in his/her kitty. However, you must not allow your kid to have whatever he/she wants. Let your toddler look at a toy in the store but don't buy it just because he/she wants it. Don't buy the toy just because you see tears in his/her eyes. Otherwise, your toddler will use this strategy to get whatever he/she wants. Your toddler needs to understand that it is not possible to have everything in this world.
Financial literacy is a tough subject. It's wrong to expect that your toddlers will understand all the financial concepts at this age. You need to teach new lessons to your toddlers as they grow up. Let your toddlers make small money decisions. Let them face the consequences of their financial decisions on their own. This is perhaps the best way to help them understand the nitty-gritty of finance properly.