Teaching Kids: How to Value Money
Nannies and Teaching Fiscal Responsibility
Managing money is a learned skill and for full-time nannies, teaching that skill often lands in their lap. For a nanny to teach this lesson responsibly, she must have some insight into how the children’s parents value money and fiscal responsibility.
From an early age, children watch as the adults around them spend money, however given the use of credit card and electronic transactions, children don’t always understand that money doesn’t grow on trees. While lessons of course must be age-appropriate, nannies can help debunk myths about money.
As soon as children can count, nannies can teach them about currency. Nannies can teach children how to count money, how to save it, how to get more and how to spend it. Nannies can share the importance of savings and help children develop their own savings plans. By helping children learn to understand the differences between wants and needs, nannies can help children learn how to prioritize where their money goes.
During shopping trips, nannies have the opportunity to teach about sales and savings. Nannies and children can clip coupons together and talk about their spending decisions. Encouraging open and honest discussions about money can help children to feel comfortable talking about money and provide them with an opportunity to ask questions. They can also teach them about credit cards and the interest paid on purchased made with them.
Playing grocery store and restaurant with children provides an opportunity to talk about money and role-play how money is exchanged. From the workers being paid to the consumers paying for their goods, nannies can help children understand the life-cycle of money.
Nannies can also teach children about advertisements seen on television and in print and empower children to evaluate products and services based on their own needs, not on what is being marketed to them.
For families who utilize an allowance system, nannies can reinforce the principles the parents set forth and help to implement and manage the system.
10 Tips for Teaching Children the Value of Money
Kid’s can’t understand how money works or the value of money unless they are taught about it. Many kids believe you just whip out your little card, put it in the machine and out pops money; or that you whip out your little card, show it to the cashier person or swipe it and you get all the stuff you want. They don’t understand that there needs to be money in the bank to back up that little card. Here are a few tips to help teach children about the value of money.
- Give your child an allowance – This is often a hot topic of debate. Some parents are against giving children money in exchange for chores done while others are against giving children money for no reason at all. The point of an allowance is to give your child the opportunity to learn money management. Decide on a reasonable amount and be consistent. Come up with rules stipulating what you are willing to buy and what things your child will need to use the allowance for. Realize these stipulations will change as the child grows older and the allowance amount increases.
- Help your child set and keep a budget – If you teach your youngster about budgeting now, you will be planting a seed that can really bear good fruit later in life. Many adults know nothing about budgeting or living within their means. Teaching your child this important life skill is one of the best things you can do as they learn the value of money.
- Keep it concrete – One idea to help your younger children understand money concepts is to divide their money into 3 groups: money to spend, money to save and money to give away (to charity or house of worship). Use some kind of containers to hold the different funds. If your child wants to save for something big, they can combine the save and spend money. Talk about the give away money so they know what it is going for and whenever feasible have them give the money to the recipient themselves.
- Open a savings account – Teaching your child to save by opening a savings account is a wonderful way to show your child how their money can grow. Now that online banking is so convenient you can log into the account and watch the balance get bigger and bigger. If you have your child set aside a certain percentage of allowance for saving and do the same for monetary gifts like birthday and holiday money, your child will develop the habit of saving.
- You buy the basics, they pay for the brand – Instead of fighting over brand names, agree to pay for the basics and encourage the child to contribute towards getting the brand she wants.
- “Use your allowance” – Oh, how things change with those three words! When your child has to use their allowance money to get extras, all of a sudden those extras that you’ve been paying for all these years are not so necessary. Many children become very frugal once they learn that they have to use their own money to buy the things they want.
- Teach delayed gratification – Talk about how important it is to save up for the things you want. Don’t just buy your little ones everything they ask for. Rather give them an opportunity to learn about saving and rewards. When shopping teach them that some days are for buying things and some days are just for looking. You don’t have to say “No” but you can say, “Not today, but we will save up our money and get it later.” Keep in mind that you must be an example for your child.
- Talk with your children about money – Children need to learn about money and how it is used. Let them in on some of the family decision making around money issues. This will help them develop fiscal responsibility.
- If you have teenagers – Talk to them about the different methods of saving then go over the possibilities with them. Help them set long term goals by way of savings accounts or savings bonds. Work with them to monitor their money and meet with them monthly to get them in the habit of paying attention to how their money is growing.
- Set a good example – If you are living within your means, not charging up credit debt and using money wisely you are contributing to the sound fiscal health of your children.
It is especially urgent in times like these that children learn to understand the importance of fiscal responsibility. If we can teach our children delayed gratification and how to earn their way instead of meeting every whim and desire immediately we will do much to improve their financial futures.
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