Children can soak up new information like a sponge, and this is the main reason why it is important for us to teach our children important life skills during their early years of life. When it comes to choosing a subject to teach your child, finance should be number one on your list.
Although children are taught about math and the many complex equations, it is also important for us to teach them practically how to manage money in later life to prevent them from making a huge mistake and getting themselves in debt. Here are some methods you can use to teach your child about money and how to use it.
Teach them basic equations
Before you inundate your child with terms like interest, tax and equity, it is important that they understand the basics of math. You can use handy tools such as Cazoom Maths to help teach your child simple equations and times tables which they will need when calculating things like percentages and costs.
Give them a bank account
One of the best ways to teach your child about money is to open a bank account for them and let them manage it. The great thing about opening a new bank account is that you will often be given an introductory cash reward. This means that you don’t have to fork out money for your child yourself, you can simply give them the account with this cash, and allow them to spend the money and manage it how they like. Of course, it is important for a child to know how a bank account works, so make sure that they read bank statements and deposit their pocket money in here to use at their convenience. The responsibility of a bank account is large, but it will instill great habits in your child from a young age.
Get them to save for college
It is important that even at a young age, your child understands the importance of money and how it can have an impact on the future. Of course, you will be the one saving the majority of their college fund, but you can involve your child and get them to save their money in a jar or bottle for you to collect and add to the account now and again. Teach them that saving will bring rewards and that it is a savvy way to manage.
Teach them about credit cards
The difference between a credit and debit card will likely confuse your child, but you can put this into simple terms with a game of coins. Present 2 bags of coins to your child and give them one of these bags to keep. This will represent a debit card and is money which you own. Now, give your child the second bag, tell them they can spend this, but tell them that you want it back in a month in full. This represents a credit card. Using coins is a helpful representation of what a debit and credit card means.