3 Important Money Lessons Every Child Should Learn

Entrepreneurship should be a goal for everyone. While we all have to be employed in order to earn money, we must remember that we can’t just be working for someone else for the rest of our lives. In one way or another, we must be able to find a way to start our own business that we can develop and grow whether full time or as a side income.

These days, many entrepreneurs are starting their journey when they’re already older. As entrepreneurial parents, your children can start their financial education and their journey to the business world as early as possible to increase their chances of success in the future.

The best way to develop business sense in children is to incorporate money lessons and related concepts into play and guided situations. Don’t underestimate them because they learn fast through experience, imitation and observation.

Here are 3 lessons you can teach your children at a young age:

1. Budgeting

Most children will often ask parents to buy toys, sweets and other things they see while in shopping centers. If your kids are starting to ask you to stuff like that more frequently, introduce to them the concept that money is limited. Inform them that mom and dad will have to work first to earn money to buy more things.

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If your current cash permits, you can tell them that they can only choose one item to buy at the moment. Otherwise, you can inform them of the consequences of buying something they really can’t afford, which leads to not having something else that is more important to their daily lives.

“It’s not about ideas. It’s about making ideas happen.” – Scott Belsky

In this way, children will learn how to prioritize and be able to differentiate their needs from wants. Even if you’re rich, it’s wise for the children to learn this concept so that they won’t grow up spoiled.

Activity Idea: Visit a candy shop or a snack bar and give your child a certain amount of money. Let him do his own shopping as he makes sure that he has enough money for the things he wants to buy. Let them figure out what they want and how much they can afford with the budget that was given to them.

2. It pays to shop around

Children generally want to own the first attractive toy they see in the store. This should be a good opportunity for you to teach them about deferring the purchase so you have more time to compare the same products in other stores or find some good alternatives. It’s wise to explain why you’re not buying what they want yet; otherwise, they would be throwing tantrums in the store.

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By shopping around, they will soon realize that a dozen apples in shopping centers may be more expensive than those in the farmer’s markets or a generic doll may be much more affordable than the famous branded ones that many girls love.

Activity Idea: Bring your children during “grocery days” — the days when you need to buy important supplies for the home. But before you go, create a shopping list and involve your kids in deciding what the house needs. When shopping, let the children have the list and let them decide which brands you should be buying.

Considering that this involves major purchases, you should have the final say on what should go into the cart but make sure to explain to the kids about product quality, prices and other factors that affect your decisions. The next time you buy groceries with the kids, consider going to another store or better yet, a farmers’ market where products have low prices.

3. Time is gold

It may be a cliché, but children will have to understand that they only have 24 hours a day to do productive things or waste away. Just like their summer breaks, they have the freedom to do what they want such as earning money by getting jobs for kids, selling food at their makeshift stalls on the yard, studying for the lessons to be taught in the next semester or just playing around with friends and taking vacations. They should understand that their decisions can affect their future.

“The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese proverb

Activity Idea: Let your child list down what she wants to do over the weekend or the school break. Sit down with them and brainstorm the benefits of each activity for their future. 

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The purpose of the activity is to let them understand the concept of time management in terms of self-development, and thus, avoid imposing activities that they should be doing. Let them enjoy the break in ways they know how — with your guidance of course.

What money lessons were you taught as a kid? Please leave your thoughts below!