Article by: Nipapun Poonsateansup CFP® Independent Finance Planner
All parents hope that their children will grow up to be good persons, happy and successful in life. That is why the parent put a lot of efforts to raise and grooming their kids. And one thing that children must be taught in the early age is a financial plan so that your children will have millionaire habits since they were young.
You should teach them these:
1. Learn to manage money themselves
When your children are attending primary school, you may start with giving them some small pocket money to learn to manage and use it in school. For example, you give your kid 20 baht then let him or her spend it. Then talk to him or her after school on how he or she spent the money. While you are talking with the kid you can add some advices to make conversation smooth and fun. Giving money to the child, you should start with daily first then move to weekly and finally move to monthly. This way kid will learn how to manage the money and develop good money spending habits. One thing that should keep in mind is parent must adjust the pocket money to match the child’s age.
2. Make the saving fun
After letting your child managed pocket money by himself, you can go further by teach him on how to save. For example, ask your kid if he/she has 20 baht, how much he/she should save before spending. In this way you are grooming your child to save before spending. Moreover, you should train your kid to save for specific purpose because this way will make kid love to save more. For instance, when the kid wants to buy a toy that cost 500-baht, parent should teach the child to start saving for that goal by saving 10% each time until kid can buy thing he wants.
Parent can also give kid a reward by putting more money after kid can save to meet an agreement. This way will make kid feels good about saving and put more efforts on saving to reach the goal. Moreover, if the child got an extra money like a red envelop on the Chinese New Year, should teach them to split some for saving first.
3. Teach kids the value of money and hard working
Start teaching kids the value of money in the early age is very vital because kids learn how to spend money since they can count money. Trick on how to do this is to give them responsible for small housework. And when they completed the task well, you can give them a reward. Besides a housework, parent can give kids an opportunity to help with their works (to match kid’s abilities). For example, if the mom has a grocery store, mon can have them helping and give them reward. This case you created a future working environment scenario and teach kids the value of money from working.
4. Teach kids how to grow the saving
After kids’ saving is reaching some amount, parent should take them to open a saving account and teach them why they should have bank saving account. Even now the interest rate is very low, and we won’t get much form this, it is a good starting point to teach kids about investing. Parent may start with the difference between saving and investing and then explain why we must invest. Moreover, to make an investment seems easy, you can teach them through board game like a millionaire game. Now a day, there are so many financial managing and investing games which are not only a learning tools but also fun and good for family to spend time together.
5. Teach kids the spirit of giving
Teaching kids the spirit of giving and sharing to people who have less opportunities, will make them truly understand the value of moneyWhen you are teaching kids on money management, besides these 5 methods above, the other important thing is you must do it. Because children learn from what they seen and observed more than the lesson you gave.
This means that you must to be a role model, do what you want them to do. And it is important that you must start teaching them early when they are still in the young age. Because the older kids are, the harder to learn.