Value of money

In order for a preschool child to get an understanding of how money works, you can pretend play shops or a profession chosen by the child where one of the elements of the game can be receiving salary - one deserves a good salary for a job well done. Then you can dream together about how the child would like to spend their salary. If the dreams and plans are bigger, you can let the child know that one salary won’t be enough for visiting the Disneyland and it will be necessary to save up. Let the child themselves pay for ice cream, hand the money to the salesperson, get the change and the receipt. This will not only foster understanding of how money works but will also train the child’s social skills that they will need at school and later in life.

Saving as an adventure

A piggy bank is the most suitable form of saving money for a small child as this is something that the child can touch, see and jiggle. At this age, it is recommended to save money in coins because the child may perceive five one-euro coins as more than a five-euro banknote. The piggy bank can be transparent so that the child would have a clear picture of how the money is accumulating. Support the child in the process of saving. Saving can be encouraged by both decorating the piggy bank and making a calendar where the child can follow how much there’s still to save to get the desired purchase. Praise the child for their small victories in the journey to mastery - maybe recognizing a small achievement on the halfway will stir up even more enthusiasm to get to the result or repeat the achievement.

Patience

When in a shop, the child may want lots of things, hence it is necessary to make them aware that money does not grow on trees and that there’s a limit to how much you can withdraw from the cash machine. It is important not to satisfy every wish of the child and not to buy everything they desire. There won’t always be enough money to buy what you need or want right away.

Value of money

Having own bank account and payment card will help realizing that the cash machine is no genie or goldfish and that the parent’s wallet is not a bottomless pit of money. Depending on the family budget, you can transfer a specific amount of spending money for the child. The child will have their money to spend as they consider appropriate. In your Internet Banking user account, you can keep track of how much money the child is spending with the card and where. By entrusting the child to buy some minor items you give them an opportunity to learn how to plan purchases themselves. This will prompt younger pupils to learn the multiplication table, addition and subtraction with two-digit numbers faster. Teach the child to take receipt and make sure that the change given matches.

Targeted savings

One of the ways of encouraging the child to save towards a specific goal is promising that if the child manages to save up half of the money necessary for some bigger purchase, you will add the other half. Likewise, it is important to make sure that the target of savings is reasonable because the child, most likely, won’t be able to save up for a playground but getting a new bike with some help by parents is quite possible.

Rules of well-thought-out shopping:

• Comparing offers of different outlets.
• Timing the purchase correctly.
• Balancing various alternative purchases (sweets or cinema).
• The meaning of marketing - explain the child the techniques employed by retailers to create a desire to buy more items.

Possibility to earn themselves

If the school holds the annual autumn market day, support your child. It is an opportunity to enjoy being an entrepreneur and earning first money. You need to figure out what products - edibles or beverages - could have demand at the school market day. What would be a suitable price so others would want to buy that product while at the same time covering the cost of producing it. Encourage the child to think how to decorate their outlet so as to attract a many buyers as possible.

Importance of money

Using real-world figures, explain how much of the family budget is spent on food, utility payments, gas, clothes and other items necessary for the family. That way the youngster will understand why you’re not always prepared to support all their financial demands. Teach considering small amounts of money from a monthly or annual perspective. For example, a youngster may think that five euros a day as pocket money is too little but you can make them aware that this amounts to 25 euros per week, 100 euros per month and 1200 euros per year.

Savings

Children are the mirror image of their parents. If you don’t make savings yourself, it will be harder to stir interest to do that in your child too. Make savings yourself and tell about it. For example, if you plan to go on a vacation in summer, tell that you’re setting aside a specific amount of money each month already now. Encourage your child to share their wishes with you and agree together how that goal could be reached and how long would it take. The key is to set a motivating and realistic target in the process of saving.

First work experience

If the teenager is after expensive stuff, clothes and other things, you can encourage them to make some money by working in weekends and summer. The Employment State Agency offers special support programs for pupils to work during summer. You can follow updates on the website nva.gov.lv. Alternatively, you can inquire at your local government about summer jobs. From the 9th grade, one can set up a student company within the Junior Achievement program which is a great opportunity to get first experience in business and try out most bold ideas.