When ace investors like Warren Buffet can start their investment journey as a young kid and master the art going forward, we can surely begin with the savings and investment nitty gritties lessons for our child early in life. In fact to influence and arouse interest, the 'father of value investing- Buffet' has started with an animated series titled- Secret Millionaires Club Volume One to immortalize financial learning among kids and at the same time make it a fun activity.
Start to teach and inculcate saving habit early: The sooner you start the better and it is suggested as finance forms an integral part as for the toy's cost which your child might be asking for. All the more, as per experts in the category, early in life till the child attains teenage, parent's money moves influence the child the greatest and later comes the peer pressure and the outside world.
So, as soon as your child learns counting exercise, make money the topic of your family discussion. Try that the topic chosen resonates with a kid's age.
Make them learn the difference needs versus wants and spending today or saving for tomorrow: It is important that you do not give in to each of your child's demand and let them understand what they really need and what they should not be splurging on just because they want it. With a simple example put forth you can enable your child learn that just because you have the money you should not spend on unnecessary items. At the same time, make them realize that money does not comes easy. So they should also begin their saving journey, one age-old way is by gifting them a piggy bank and ask them to accumulate for whatever they desire to own in future.
Let your child experience money matter on a practical basis: With practical experience at hand, the impact on your child shall be more bountiful. Help them save, spend on items they need and then induce the learning that they have lost the money in the process to buy the desired good. So, to again begin with the saving cycle. Once your child gets to understand the hard cash you can slowly begin to provide details on virtual money.
Do not intervene once child begins managing his money: Small amounts that you give to your little one as pocket money, let them deal with it smartly. In case they meet some negative consequence do not come to their rescue as then in later part of their life with these lesson they will be in a position to make better money decision. Else in the other case, they may expect your backing in a crisis situation.
So, as a parent be a responsible influencer and do not pose a sense that money is an unlimited resource to your child. Also, in a state of financial crisis, it is necessary that you make this fact known to your kids as well and not hide.