1 - Set a regular allowance and encourage the use of a savings jar. You can buy one ready-made or decorate one together, but either way, help your child save in their own jar. You can start with as little as 10 cents at age 4-5 and move up to dollars in first grade. The age at which allowance is given and the amount of money divided among children can vary greatly between households. Try to think about what your child might want to buy, how much it costs, and how long you're willing to wait for it together. Set a regular allowance amount regardless of the child's age or behavior. The allowance belongs to the child and can be given weekly or monthly, depending on what you decide.
2 - Honor your child's choice on how to spend their pocket money. Give them a free hand in choosing what to buy, even if it's not what you would buy with your own money. Don't interfere between your child and the learning of life! Make sure to be advisers, not critics. Suggest what to buy, explain your preferences and reasons. And that's your role, that's it.
3 - Let your child try and buy something in a store, like a bottle of water. At first, do it together, next to you, and then when you're outside the store (start with a small store!). Pay attention to the bill compared to coins, the value of money and the value of the bottle, and what is left over, how to count (demonstrate counting or let them count). Let older children also swipe your credit card (or phone) to teach them the different methods of transferring money.
4 - Go choose something together in a store that your child loves and plan together how to save money for it. You can also choose something online... :) And then we will learn about smart consumerism: comparing different products, different stores, and even importing to Israel versus buying locally.
5 - Seize learning opportunities from daily life. For example, while at the supermarket, compare prices, organic/non-organic produce, Tiv Ta'am vs. Shufersal, etc. Ask yourself questions like, "What do you think the advantage is of buying this product? Is there a difference you need to know about?" And explain your decision-making process, for example: "I noticed this product doesn't have a red label, so I prefer to buy it even though it's more expensive by 3 shekels because I believe it has higher nutritional value."
6 - Don't create limiting beliefs. If you decided not to buy something because of its price, tell your children, "It's not a priority for us at the moment", instead of saying, "We don't have enough money for that/it's too expensive for us." Why? To avoid creating limiting beliefs from a young age. After all, if we really want something, we can always buy it, even if it costs 10 times more, but it might mean we need to give up other things, and it's not always feasible for us to pay the price. Therefore, we should establish our own priorities and be mindful of them when we teach them to our children.
7 - Books are very helpful for learning and also workbooks. I recommend using books to create a learning experience for children and motivation to understand and explore. There is a wonderful series that I came across called "The Gold Bunny", "Spend!", "Earn!" and "Save!". Each book teaches the basics of economics, for example how to build a savings plan, discover the value of waiting: to sow today, to reap tomorrow! and even about the choice and pleasure in conscious spending. Anyone who doesn't know how to talk about accessible economics to their children from a young age will receive a variety of ideas here. Another great book is "How to Divide the Cake" by Dina Friedman, which effectively introduces financial concepts to children and also comes with an activity and creativity workbook.
In modern economics, I believe it is important, useful, and enriching to talk to our children about money from a young age. Starting from payments for things they love, activities, and more - this way, the work that I do during the day translates into a salary at the end of the month. We can also share dilemmas about a customer who did not pay on time and how to approach it (a true case! I discussed it with my 8-year-old son).
Talking about money, economics, and payments is usually a complex topic, even for us parents. Think about what truths you would like your children to learn from you? Perhaps there are some that you can let go of? And where can you expand?
It is a widespread and complex topic. How is it for you? How do you manage financially with your children? Is this a transparent topic for you?
Follow next week's article in the "Don't Interfere with Their Pocket Money!" series
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