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16 Fun And Inspirational Ways To Teach Kids About Money

16 Fun And Inspirational Ways To Teach Kids About Money

Being a parent, I find kids are very clued in on what they want, and do not seem the slightest bit concerned that it will involve a monetary cost! What I find even more amusing, is that they have no problem spending our or anyone elses money, but ask them to dig into their savings and I am met with highly indignant faces! Oh yes, before they decide to spend their money, there is deep thought and analysis before a decision is made, and of course the guilt trip I am put on for even suggesting they pay for it themselves, never ceases to amaze me!

Yes, I am a parent who tries to teach my kids about money, but finding fun and inspirational ways to do so, is not always easy, especiallly when dealing with different age groups of kids.

Here are some examples of ways you can teach kids about money.

1. Calculator

Give them a calculator while out shopping, so they can key in the item value and keep you informed of costs on an ongoing basis. Comment on some items so they know what is cheap and what is expensive!

2. Allowances

If you aren’t doing it, just try giving allowances for a few weeks, different allowances for different age groups. Be clear to them that they will get no other money for anything until such a date, so they are in charge of the money they are given. Try giving different amounts starting small and see what their spending pattern is like. See if they spend it all in one go, if spend it on junk food, treats, small toys, books etc. This will give you a baseline to work with. When you have this you will know what areas you need to work with for your child. Of course young children will struggle with this so only use it for kids who understand time and can handle some level of responsibility.

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3. Shopping

Take them shopping with you and ask them to take notice of the prices of different items of the same type. For example how branding, quality, weight, discounts etc work.  Ask them why they think one is cheaper, more expensive, etc just to increase their awareness of cost. Kids get so bored out shopping so keep them involved. It is a great way to learn.

4. Challenges

Set them challenges to work individually or as a team to buy something and come back with the most money. Of couse you will also need to explain about value to them so do this after they understand the concept of shopping covered in the previous point.

5. Coin Game

Play a coin game with them where they need to work out how many small coins equals one bigger one etc. For smaller kids they may need a reminder chart which you can simply be drawn out. This way they will understand that its not just the number of coins that matters but how much each coin is valued at.

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    6. Observe transactions

    Ask them to observe you paying for something and how the transaction goes. whether it is card, cheque or cash transaction. Let them see how each transaction happens. Teach them that money is a form of exchange for a goods or service! Explain the difference to them with examples.

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    7. Banking Experience

    Take them to a bank and show them how it works. Kids love mystery and stories. Explain where the money goes, that is the money that goes back to the bank and the money that comes out from the bank.

    8. Take them to an ATM

    I find this always amuses me, as my kids think its magic that a card just gives me what ever money I ask for. I show them that this really comes from my savings or from a loan but that every time I use the card to take money out what I have left, gets lower and lower.

    9. Brainstorming

    Ask them to think of ways to save more money and get more money. No matter how whacky their ideas may seem, they are thinking it through and that is good. Write down their ideas and try to keep adding to the list. You never know if you may come across a marvelous money saving or money forming idea!

    10. Observation Field Trip

    Take them shopping or simply on a car journey through a commercial area and ask them to look around them and see different ways people are spending money, and on what they are spending, whether it’s gas at the station, taking money from an ATM, carrying packages or groceries, or whether they are doing a task where they will get a monetary payment in return.

    11. Online job chart

    Give them a jobs list at home and allocate different monetary values for different tasks. Be sure to have a value of zero for some tasks which they need to do as part of the normal contribution to the household. This also teches kids about value..

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    12. Money Bingo

    Play money bingo where they need to work out how many coins match a number on a box and who ever gets the most right wins. For this to work they will need to add up the correct number of coins and stack them on each number. Of course you will need large boxes and plenty of space.

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      13. Coin Groupings

      Gather all small coins and ask kids to separate them into the same groups. Ask them to write down how many coins are in each group.  Then involve them in trades to try to get lots of coin mixes of different coins going. The trades need to be for the same monetary value.

      14. Allocation Jars

      Give kids three jars and ask them to label and decorate them as they wish. They should be labeled Spend, Save and Give. As a parent you can either decide what amount of money they have goes into each or encourage your child to think about it and then come to an agreement with them over the distribution of the money. Discuss with them also what each jar represent and what will happen to the money in each jar. Kids love seeing things build up and love to shake the jar or take money out and re-count again. Physically seeing their money will give them a greater awareness of money and how it can be used.

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        15. Coin Rubbing and Tracing

        Do coin rubbing and tracing shapes of different coins. For notes, ask the kids to find as many differences as they can see between the notes. This will increase their power of observation!

        16. World currency

        Encourage them to collect money from around the world and to look up the value of each currency. This is great to let them know about money on a global scale. Open n online converter and show them how to do their own conversions! It will definitely make them think!

        “The easiest way to teach children the value of money is to borrow some from them” – Unknown

        Photocredits: Pinerest-Moneysavingmom, Freehomeschooldeals, Creeksidelearning.

        Featured photo credit: How To Teach Kids Money Skills, by Carissa Rogers, Flikr via flickr.com

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        Last Updated on September 2, 2020

        How to Set Financial Goals and Actually Meet Them

        How to Set Financial Goals and Actually Meet Them

        Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

        In this article, we will explore ways to set financial goals and actually meet them with ease.

        4 Steps to Setting Financial Goals

        Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

        1. Be Clear About the Objectives

        Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

        It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

        Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

        2. Keep Goals Realistic

        It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

        It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

        3. Account for Inflation

        Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

        Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

        For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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        4. Short Term Vs Long Term

        Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

        As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

        By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

        How to Achieve Your Financial Goals

        Whenever we talk about chasing any financial goal, it is usually a two-step process:

        • Ensuring healthy savings
        • Making smart investments

        You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

        Ensuring Healthy Savings

        Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

        This is the focal point from where you start your journey of achieving financial goals.

        1. Track Expenses

        The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

        Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

        If you’re not sure where to start when tracking expenses, this article may be able to help.

        2. Pay Yourself First

        Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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        Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

        The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

        Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

        3. Make a Plan and Vow to Stick With It

        Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

        Nowadays, several money management apps can help you do this automatically.

        At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

        Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

        You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

        4. Make Savings a Habit and Not a Goal

        In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

        Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

        • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
        • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
        • If you go shopping, always look out for coupons and see where can you get the best deal.

        The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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        5. Talk About It

        Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

        Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

        6. Maintain a Journal

        For some people, writing helps a great deal in making sure that they achieve what they plan.

        If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

        When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

        Making Smart Investments

        Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

        1. Consult a Financial Advisor

        Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

        Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

        2. Choose Your Investment Instrument Wisely

        Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

        Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

        As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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        3. Compounding Is the Eighth Wonder

        Einstein once remarked about compounding:

        “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

        Use compound interest when setting financial goals

          Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

          Start saving early so that time is on your side to help you bear the fruits of compounding.

          4. Measure, Measure, Measure

          All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

          If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

          Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

          The Bottom Line

          Managing your extra money to achieve your short and long-term financial goals

          and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

          More Tips on Financial Goals

          Featured photo credit: Micheile Henderson via unsplash.com

          Reference

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