As an adult you know well that needs are things that are indispensable for survival and wants are the ones that you like to have but can live without them. But your kid will not know this difference unless you teach him.

A kid’s thought process is different and his priorities are centered on things that will make him feel good. Anything a kid desires becomes his need. As a parent, you should teach him about the importance of money in life.

Introduction to Money

You can start by introducing your kid to money when he is able to count. A kid’s attention span is short. If you are too preachy, the kid will lose interest. Add an element of fun when telling him about money. Play the game of counting money with him. Make him realize the buying power of money.

Encourage The Power of Saving

It is important that your kid learn about the benefits of saving. Get a transparent jar where he can collect money and watch it grow. If you are giving him allowance, ask him to always put a certain amount of that into the saving jar.

Reward him when the jar is full. This will encourage him to follow the practice. Be a role model for him and share the home budget with him to show how you are managing the finances.

Needs and Wants

Take your kid for shopping and let him decide what he would like to buy. Engage in discussion with him about the chosen item and ask him if he really needs it. Suggest him other useful options that he can buy with that amount.

Teach him how to evaluate the utility of items and value of money. This will help him in understanding the difference between needs and wants.

These simple but effective points will help him in adulthood in making wise and smart decisions about his finances.