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Teach the value of money using virtual allowances

Piggy banks can be considered an endangered species especially since kids rarely see their parents giving out actual cash.

As we move towards a cashless society and online buying, we need to help children understand the concept of money.

National Endowment for Financial Education stated that parents are the biggest influence on how kids will spend their money.

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Here are a few ways you can use virtual allowances to teach kids about financial literacy:

1. Make digital allowances feel real

Kids can find it hard to understand the concept of money since they see their parents swiping their cards or using their phone to make payments

Parents should explain the process of this to their kids.

Whenever you make a payment show the receipt to your children. Show your bank account and how the money is being taken out of it.

If you are using cash then go to the ATM, and explain to them how the money is being deducted.

Piggy Bank apps like Famzoo can help kids understand the consequences of spending. For instance, it will send reminder messages to your child if they have bought something.

Your kids will also have to gain your permission before they make a buying decision.

Children’s online safety book- teach them about internet safety from a young age. For 3 -10 years old

2. Use virtual allowance to motivate your kids

Parents can use virtual allowance to motivate their children. Parents can exchange points, for instance buying more skin on Fortnite for good behaviour or getting a certain grade.

Think about behaviours that can be rewarded. You can give rewards for completing small tasks. For instance, helping with house chores, keeping their room clean and completing their homework. Or provide big monthly rewards, like allowing them to buy a new game after achieving a certain goal.

Talk to your child daily to see how they are progressing with their goal. Do not use this to punish your child but at the same time don’t reward them too easily.

Set up some house rules so you can check on their progress and keep track of the reward system.

Have consequences for breaking the rules. Do not reward your child before the work Is being completed.

See how your child gets on with the plan. Be flexible to revise the plan in case it is not working. Also, give your child some time to understand this concept.

If your child is being rewarded too fast and very easily then add some challenges or other objectives to it.

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3.Reward your kids for saving

Teach your kids the importance of saving by rewarding them for this behaviour. For instance, set an interest rate for having a certain amount in their virtual account for a certain period of time.

RoosterMoney app has a default rate of 9%. A survey conducted by the app found that kids save on average 43% of their allowance because of this.

Famzoo app will notify children of their returns (given by their parents, ofcourse). This is exciting for the kids when they see notification of more cash in their account for not even doing anything.

Using this strategy, you can also gain an understanding of your child’s behaviour towards money. Some children can be a saver while another can be a spender. This can help you decide what lessons you will need to reinforce.

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4. Allow them to make financial mistakes

Give your child a virtual allowances. It will help them learn the concept of money and responsibility.

As we move towards a cashless society it can be hard for kids to understand the value of money.

Integrating virtual allowance with their favourite activity can be a good way to teach them the idea that money can run out.

For instance, if your child is a gamer then integrate virtual allowance with their favourite game.

Give them the financial freedom to spend the cash where they want.  They might regret making a certain buying decision. But making mistakes is part of learning.

It is better for them to make a mistake with a $20 allowance than a bigger sum in the future.

In case they have any regrets talk to them about it but do not replace the allowance. Let them know the consequences of a bad financial decision.

Children’s online safety book- teach them about internet safety from a young age. For 3 -10 years old

 Here are some fun games that can help teach your kids about financial literacy:

1.Renegade Buggues

  • Available on iOSand Android
  • For children aged 6+

This is a game that educates kids about financial literacy with a focus on saving as much money as possible when doing grocery shopping.

It helps kids understand how to compare prices, buying in bulk and sizes of the product when playing the game.

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2.Celebrity Calamity

Available for iOS

For kids ages 7+

This is an award-winning game for kids that shows celebrities and how they spend their money.

As the player, your kids will manage the finances of their favourite celebrity and hopefully stop them from spending more than they earn.

When your child manages to get their favourite superstar to live within their means they are being rewarded. Whereas reckless spending can lead to bills that have to be paid at the end of the day.

It is an exciting game that teaches kids how to manage money.

3.The Game of Life

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This game is developed by Mamalade Game studio and based on the famous board game (Hasbro)

It teaches kids to learn to pay for college and how to buy a home.

It has amazing graphics and also a multiplayer feature which makes this game excited and have been downloaded more than 100,000 times.

Warning: There are in-app purchases and can add up quite quickly. This can be a good lesson to teach them about spending from the start of the game

 

Children’s online safety book- teach them about internet safety from a young age. For 3 -10 years old

4.Star Banks Adventure

  • Available for iOS
  • For kids ages 7+

This app combines puzzles with questions about basic financial concepts so kids can save the world from drowning in a financial crisis.

Though this game is said to be suited for 7+, I think older kids will enjoy it more.

Your kids will get coins that they can save and make upgrades on the game so they can reach their financial goals. They do this while having fun and learning financial concepts such as saving, investing and inflation

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The documentary that teach kids the value of money

Living On One Dollar — Amazon Prime Documentaries

This is a unique documentary about college students that attempt to live on $1 a day. They also try to mimic the lifestyle of those living under the poverty line.

They go through the hardship, support and joy of the local community.

It is an eye-opening documentary that can help your kids appreciate what they have and understand the difficulty faced by other children.

Here are tips to you keep children safe in the digital age : 

Tips for Non-Tech Savy Mums :4 tips to digital parenting for non-tech savy mums

Stop kids from being datafied : Are your children datafied from birth

3 dangerous places for children to be online : 3 places kids should have limited internet access

Finally don’t forget click below:  

Children’s online safety book- teach them about internet safety from a young age. For 3 -10 years old

2 Comments

  1. Kai says:

    Thank you for the wonderful article

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