Communication is one of the most important skills a child needs to learn, affecting relationship forming, confidence and learning abilities.
I've been reading a little about communication skills and the generally agreed points are:
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Talk to your baby/child about what you're doing, describe what you're seeing on walks and bus/car journeys. The more you talk to them, the more they will understand.
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Every day have 'chat time'. Turn the TV or radio off so there are no distractions and your words can be heard clearly.
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Try to have family meal times at least once a week, discussing the daily events and including the baby/child in the conversation.
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Ask open-ended questions and not just yes/no answered ones. This encourages speech and the thought process and boosts confidence levels.
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Sing to and with your baby/child. The repetition of the nursery rhymes and songs will increase their vocabulary.
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Watch your baby's/child's responses. Look out for sign that they've had enough - closing their eyes, turning their head away or simply saying "no".