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5 Ways To Teach Your Child Healthy Money Habits, According To A Financial AdvisorTeaching your child how to handle money should start early.by Kate Borbon .
Experts say that teaching kids how to handle money should start in childhood. One SmartParenting.com.ph article says parents impart their attitudes toward money to their children — if your child sees you ignore your loans and debts, he might do the same in the future.
Kaye Bellon, a financial advisor, mom of two, and member of Smart Parenting Mom Network 2020, tells Smart Parenting in an email interview that though her kids are too young at the moment (two years old and 10 months old), she already has tips she’ll use to teach her kids how to handle money well. Here are Kaye’s tips.
5 ways to build good money habits in your child
1. Give him a coin bank.
A coin bank could be a kid-friendly way to start teaching your child the importance of saving money. Kaye says that she and her husband give their son spare change for him to put in his and his sister’s coin banks. “We make sure he evenly distributes the coins so that it is fair, and it becomes a fun learning activity for him to sort, count and insert the coins in the slot. Once it is full, we will bring him to the bank with us to deposit in his account so he knows where his money will be kept.”ADVERTISEMENT - CONTINUE READING BELOWCONTINUE READING BELOWRecommended Videos
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2. Open a savings account in his name.
Kaye advises opening a savings account for your child, something she and her husband did for their kids even when they were only months old. These accounts hold the money the kids received during occasions like birthdays and Christmas.
“Once they are a bit older, we will start giving them the task of going through the whole depositing process (count money, write account details, line up and hand over money to teller) as well,” says Kaye. “Once they are much older and know in theory and in practice the different options of saving and investing, we will transfer the accounts to them so that they will have the freedom to decide what to do with their savings.”
3. Reward him for doing chores.
Kaye shares that when as a child, her mom would give her coins as a reward for doing chores. “The thrill of seeing my coin pile grow day by day and knowing that I was making my own money by ‘working hard’ was a great lesson for me, and I would also like my children to experience it as well.”ADVERTISEMENT - CONTINUE READING BELOW
It’s worth noting that some experts advise against this, saying that it might instill entitlement in a child. Family psychologist Suniya Luthar says kids should be taught to do chores to help maintain the home and not to receive a reward. Still, it depends on you if you want to practice this or not. Just be aware of its advantages and disadvantages.
4. Have him choose one gift at a time.
Kaye says she learned this tip from celebrity mom Bettina Carlos, who teaches her daughter Gummy to choose only one item to buy during each birthday. “I like that it builds up a child's excitement for the birthday itself, he/she gets to exercise free choice, and there is greater appreciation & value for the item selected because it would take a significant amount of time for him/her to choose the one thing that he/she will get to take home,” Kaye explains.ADVERTISEMENT - CONTINUE READING BELOW
5. Teach him how to differentiate wants and needs.
Adults know the difference between wants and needs, but kids need help figuring this out. Kaye explains, “If they NEED something, then as much as possible, we will bring them when we make these transactions so they can see that money is essential in acquiring these items,” she says. “However, if they WANT something … then they will either pay for it using the money that they saved, or they will wait for their birthday to get it.”
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