Part of the role of being a nanny includes teaching your charges life skills, proper manners, and preparing them for success. One of the most important life skills children need to know (and one that is generally omitted at school) is how to manage finances properly.
Teaching young children how to be financially savvy can help them succeed from an early age. Your teaching may involve how to make a budget plan, how to save money effectively, and how to create income independently.
We created a simple guide on how nannies can teach kids about different aspects of managing their finances. Our guide also includes easy activities you can do with your charges to help them understand financial management.
Concept of Saving
Educating children about financial literacy and its concept at an early age of four helps build good financial skills. While giving the child a piggy bank can introduce the concept of saving, this method doesn’t allow for many visuals, which means kids don’t see how much they’re earning.
A nanny can use a clear jar to show the children how much they’re saving. Explain to the children how big of a deal it is when their money is growing and familiarise them with the coins and paper bills to help them grasp the value of money.
As children grow older, they are also given more responsibilities. Teenagers will benefit greatly by being taught to record their savings, how much they can spend, and how much is available in their funds.
Allowing the children to set up a simple bank account takes money management to the next level. This system will allow them to learn how to manage a larger account as they grow older.
As soon as the children turn 18, they will start receiving multiple offers for credit cards, especially once they start college. Nannies should teach them the risk of signing up for credit cards, including the possibility of racking up debt.
Nannies should let the children understand that money is used to buy things. One effective way is by grabbing some bills and coins from their jar, accompanying them to the store, and having them physically hand the money to the cashier in exchange for the item they want to buy.
At a young age, children should also be introduced to opportunity cost, which means having them choose between two options and teaching them the possible outcomes of their choice.
For example, you could ask the child to choose between some sweets and a balloon . If they choose the balloon, they get to play with it until it pops. However, if they choose the sweets, they won't be hungry.
For most kids, allowances are given on a daily or weekly basis. While this system may help them learn how to save, it won’t make them understand that money is earned.
Nannies can introduce the idea of earning by giving the children chores to do around the house. This can include taking out the trash, cleaning their room, washing the plates, and setting up the dinner table, among others. Caregivers can then pay them a commission based on the tasks they successfully complete.
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