“Don’t spend too much!”, “Save for a rainy day!”, “This is too expensive!” and many more standard money phrases that children hear every day don’t make sense to them. In their first years, telling them that something costs too much is like explaining bio-chemistry to a philosophy major or vice-versa. If you want to raise financially responsible children, start slowly, and get remarkable results over time. Here is a little guide on how to do it!

First off, talk to your child about money in a very normal way. After all, it is a part of our routine. Just like you teach them to brush their teeth before bed, teach them what money can do. Don’t worry too much about it and talk about it in a non-emotional, informative way. Also, don’t force it on them. Wait for the moment when there are interested in what money is. When they ask you what a dollar bill is, tell them what they can buy with it. This process will introduce them to the value of money.

It is important to be aware that the child doesn’t know anything about finance so far, so start by taking baby steps. First, tell them that different things have different prices. When you have money, you should, first of all, think about the most important things you can buy. Ask them what they think these are. Depending on their response, tell them that we always need to pay for our utilities and food first. After, we can think about other necessary stuff like clothes, shoes, and supplies. In the end, we can think about entertainment, toys, sweets, and other things they like. Scientific studies prove that children who were taught to prioritize spending from a young age fall into considerably fewer money issues as adults.

Talking about money is not enough to raise a financially responsible kid. You should include them in the process as well. Ask them to “help” you pay the utility bill. They will immediately feel responsible; therefore, they will know that the process is important and get to know it better. Take them grocery shopping. Let them pick the products for the week while congratulating them on the good financial choices and explaining the wrong ones. At the shop, let them pay for the products. Tell them the step-by-step process, and watch them give the money to the cashier and count the change. I would also recommend trying different payment methods: cash, card, mobile apps, etc., so they acclimatize in all possible ways.

After you see that they are doing great with handling your money, let them have their own. An allowance system is a great way to make your child feel financially independent while you still have a look over their choices. It would also help if you explained that the money they don’t spend during the day will always be theirs and you will not take it away. This way, they can save up enough money for an important purchase. You can also bond with them over setting the goal amount of cash for the “big” spending.

Lastly, don’t forget about the power of movies and books. Buy them some kid-friendly financial literature financial literature. Let them watch some short films, and the next thing you know, your child will be explaining how taxes work to you!

Financial responsibility comes from an early age, from piggy banks to savings accounts; guide your child’s path through it from the start!