While it may seem trivial to teach a little child about money, keep in mind that every time they watch an ad on TV, it becomes more difficult to teach them about smart spending. Consumer culture is always hard at work, targeting even the youngest age group of people. So, the earlier kids start developing good money habits, the better. The good news is, it’s not such a complicated thing to teach. Here are some methods and tips

Break the ‘disposable’ mindset
From old clothing to broken toys, throwing stuff out is rampant in our culture and it’s what you’ll need to work on first to set a good, solid base for raising a money-wise child. Children should learn that possessions need to be valued and cared for. If your child misuses a toy, for example, or throws it about, explain that their actions will cause damage to the toy, and that treating it properly is the way to go.

Many children today seem to take money for granted from an early age! It’s not surprising anymore to catch a three year old, for example, breaking something and exclaiming: Nevermind, daddy will get another one. In cases like these, nipping the problem at the bud is much better than waiting till they’re older.

Explain to your child that replacing something they broke would cost money, and that you’ll need to decide whether spending that money is a good idea, or will it be wiser to spend the money on food, petrol, etc.

When it comes to stuff your child has outgrown, such as clothes, teach your child that throwing them out is not the best way to go about it, especially when there is still some good wear left in them. Engage your child’s help in washing and folding old clothing to be passed to a shelter, for example. This shift in attitude from ‘chucking it’ to ‘waste not’ can help kids build a better foundation and respect for money.

Be an exemplary role model
Children really do learn quicker and more effectively through watching what their parents do — it has a greater effect than merely telling them what’s right and what’s not. Teaching them about money is no exception. If you want to get them into the habit of saving, start saving money yourself and make sure they know about it. Be seen placing money into your piggy bank regularly and get them to do the same with the money you give them. Before long, it will become a habit — a beneficial one!

The benefits of delayed gratification
We’ve all seen and heard this before — a child insisting he or she wants something right now! It’s actually quite natural for a child to want something right away, but learning to be patient is vital when it comes to teaching kids about the value of money. How?

For one, the buffer period between wanting something like a toy, a snack or anything else and acquiring it will train little ones to be patient enough to think if they really want something urgently or if it’s just a whim, or, if it can wait. In the future, kids who are taught this way will be less prone to engage in impulse buying and wasting money on stuff they don’t really want.

If you’re dealing with an exceptionally persistent child, start off with a short waiting period — the important thing here is to start somewhere. For example, help your little one save up for a treat or an inexpensive toy. Give him some money, and tell him that tomorrow and the day after you’ll give him some more and then he can go out and get the desired item.

Start teaching them this from young, even before they begin to use money. Creating opportunities for delayed gratification is one of the best gifts parents can give their children and can turn out to be an indirect yet effective lesson on money.

Money isn’t made in the ATM!
When kids see bills pop out of the ATM, they don’t realize that money is a finite resource. Explain that you work to earn money, and the bank is just a place that keeps it safe

Use a clear saving jar
Clear jars allow a child to see the money ‘growing’. They’ll get to witness as the jar fills up with money. Keep showing and talking to your child about it,
and yes, make a big deal about it.

Show them the value of money
Showing is much more effective than mere telling. So, instead of going “That toy costs RM8 ”, get your child to get RM8 out of the savings jar, take it to the store and get him to physically hand the money over to the cashier to purchase the toy. That will give them a much clearer picture of the value of money.

Set good examples
Children are always watching and listening as you buy or pay for things in front of them. Even when parents are arguing about money, children are noticing and taking mental notes. So, be careful with your attitude towards money if you want them to follow in your example. Whenever you have the chance to do so, explain your actions to your child when you’re dealing with or handling/using money.

Be ahead of the mindless advertising culture
Almost every kid loves to watch TV advertisements — colorful shots, funny, cute character, etc, and most importantly, those cool products on sale! While we’re not suggesting that your child should shun all advertising activities, a bit of healthy skepticism is crucial.

Kids need to learn to resist the allure of products on TV, not just to avoid impulse buying, but also to keep from buying into hidden messages behind the ads — such as “Use this and everyone will like you more”, or “This product will make you better than your friends”.