As a parent, you want to give your children a head start in life by introducing them to personal finance early on. This will significantly impact how they live in the future. Basically, personal finance is all about handling money. It involves financial decisions and practices of saving, investing and spending.

To start, you can teach your children the value of frugality. Frugality is the ability of the person to spare lavishness and extravagance to save money. It can be developed into a lifelong habit if you start early on. After all, you do not want to raise your children focusing on materialism and status. With this, it is crucial that you teach your children how to make sound financial decisions by being frugal.

Here are some ways to raise frugal children without overdoing it:

Keep in mind that your children are watching you

To teach frugality, you have to live it. In other words, you have to lead by example. As a parent, you always hear this all the time but it can make a difference at the end of the day. If you want change, it should start with you. There is no other way to send a concrete message to your children than your own example. You need to model frugal lifestyle and teach your children as they go along. More importantly, share your past mistakes and let them learn from that.

Teach children about money management

Money management is the process of budgeting, saving, investing and spending. Remember that teaching them money management won’t be easy and it is not a one-night deal. They need to learn the value of money and the hard work it needs to earn it. You can start by reducing the impulse buying.

Turn off the media
You have the best intentions but it will be for naught if you allow your kids to spend more time watching TV and checking social media. When they see things often, they will never stop wanting it. Whatever you are teaching to your kids will surely be undermined. This doesn’t mean that they shouldn’t watch TV or check social media. The prudent thing to do is to limit their exposure to it. Children won’t crave or want something if they do not know it exists.

Set time limits for gadget usage
Ideally, you should not buy gadgets for young children because they will be hooked. If you already bought one, the least that you can do is to set time limits on gadget or electronics usage. Gadgets are not necessarily bad especially if it is used for interactive learning but if it encourages dependence, it is not healthy. Children should find contentment and joy in simple activities like playing outside, singing, dancing and many more. These things are not very expensive.

Have fun together
Many people think that frugal living is boring because it is basically uneventful since there are no lavish things and extravagance. Some even see it negatively because it is another way of depriving yourself. Your children should not see frugality like these. It can be fun if you want it to be fun. By having fun, they will see frugality as a positive experience. You can start by participating in activities like going to the park, swimming, hiking, camping, cooking, baking and many more.

Surround your children with frugal people

Without a doubt, it is difficult to live frugally. Children won’t understand this lifestyle easily because whatever they see, they will want.  Living frugally is not yet mainstream so there are things that you need to discover on your own but make sure to impart it to your kids. Your journey will be easier if you surround your children with frugal people. This is the best kind of influence.

Teach them about strong work ethic
Teaching your children about strong work ethic is one strategy to encourage good financial habits in the future. Work ethic is a value centered on the importance of hard work and diligence. Basically, work ethic will strengthen and enhance character through hard work regardless of the field of work.

Give them experience with handling money
It is better to give them experience with handling money because they will learn from it. Whether the experience is good or bad, the children will understand the importance of money. For example, you allowed them to buy toys after saving for one to two months. After buying, they broke the toy in just three days. This will serve as their learning moment. They will realise that there are things that you worked hard for and it will turn out to be a waste after how many days. Next time, they will make smart buying decisions.

Ask the school to teach them personal finance
Children learn about dimes and pennies in first grade and will hear it again in high school. They will learn to identify money and that is helpful but other than that, the school doesn’t teach things about personal finance.  It is crucial that you ask the school to teach your children personal finance because they spend the most time in school. You won’t be there for the majority of their spending decisions. Children should learn the basics in grade school from savings to investments so when they reach high school, they will be good at it.

Make a rule about savings


You have to know that as soon as the children are used to saving, they will do it effortlessly. This is turning saving into a habit. You should create a 10% savings rule. Every day, the routine of children is to save 10% of their money and as soon as they are settled, they won’t have problems doing it – like saving is natural for them.

Frugality is a way of life. You have to teach your children as soon as they understand the value of money and spending ramifications. You have to remember that your children will inherit your attitudes toward money. However, you should also understand that extreme frugality is counterproductive – if your children will be too tight in the future, they will miss meaningful opportunities with family and friends just to save few dollars.