Why it’s Essential to Explain the Link between Work and Money to Kids
Financial experts agree that it is crucial for kids to learn about the value and appreciation of money from the earliest possible age, and the best place for them to obtain this information is at home from their parents. Children who have been taught the fundamentals of earning and saving money from a young age will be far more confident and successful as adults.
Working Teaches Kids the Relationship between Money, Time and Possessions
It’s crucial for children to learn from a young age that money has to be earned. As such, parents or caregivers should discuss how important it is for them to work for their money, and one of the best ways to demonstrate this is to provide them with paid jobs that can be done around the house (not to be confused with regular chores though). For instance, younger children can be paid to clean baseboards or wash the family car. Older children can be encouraged to seek paid working opportunities like walking neighbor’s dogs or mowing lawns.
When children are working for their money, they will also realize that there is time involved with earning it. As they become more accustomed to working and earning money, they often realize that the plastic toy that they initially ‘had to have’ wasn’t worth the hours of labor they put in to buy it.
Teaching the Concept of Saving
Once children have earned money, they will usually be tempted to spend it right away. However, this is the right time for parents to teach them that they need to save a portion of each amount they earn. This can be done by implementing a rule stating that 20% of their earnings must be saved for a rainy day and a further 10% for charitable causes that they are passionate about. They should then be allowed to spend the remaining 70% however they like.
The above-mentioned percentages are merely a guideline – parents should adjust these accordingly if needed. Establishing this financial routine will help children learn to spend less than they earn, which will go a long way in preventing them from accumulating consumer debt as adults.
Part-time Jobs can Teach Time-management Skills
Many parents think that children should not have part-time jobs because ‘it will interfere with their education.’ However, many children’s schedules will allow for anything up to 10 hours of part-time work per week without it affecting their study time.
Along with learning time-management, having a part-time job will also teach children valuable social skills, responsibility and work ethics – skills that are essential for them to succeed as adults.
Teaching children the importance of working for their money from a young age will also help them deal with the discomfort of the fact that although not all work is pleasant, it simply has to be done. If you would like to learn more about investing for your child’s financial future, contact our team today.