MONEY MANAGEMENT TO TEACH YOUR KIDS
Money management is perhaps one of the most common skills that every parent, whether consciously or unconsciously, teaches their children. You can hold a step-by-step discussion about money and finances, or you can do it in the real world, such as during weekly supermarket trips.
You may be a techie father that utilizes a children’s savings app to show the kids how to manage their money online, or you could be a conventional mom who keeps track of saves and expenses on a piece of paper. Whatever approach you use, teaching your children about money management should begin early.
Children’s financial management education can help adults make better financial decisions later in life.
Provide them with an allowance and give them spending freedom
Start by giving your children a certain amount of money weekly or monthly as soon as they can handle money. Make it clear to them that this money is theirs to manage. Make sure you cover the basics of buying needs and luxuries. Make it clear that the allowance you provide is set and that it is their responsibility to make it work. If they want to buy something, they must be patient and save their own money for it.
When they ask you to get them the newest pair of shoes from the mall, don’t give in. They will only learn the value of money and how to spend wisely if they act firmly.
Offer them other sources of income
When your children learn that the allowance, they receive from you is a set amount, the prospect of having extra money will pique their interest. Allow them to undertake extra duties and provide an incentive occasionally. This will encourage them to be more proactive in assisting at home and even helping relatives and neighbours.
Use caution when it comes to the frequency of offerings and the behaviours that are rewarded. You don’t want kids to believe that they’ll be paid every time they help around the house. A well-designed incentive system will encourage a strong work ethic.
Teach them to save regularly
Encourage your child(ren) not to spend all their available funds, even if they receive an allowance. Provide children with saving choices if they utilize their allowance for school meals, for example. Bringing your lunch can help you save money on cafeteria meals. Draw a clear image of the benefits of using the generic item if they have the need to acquire specific goods available at home that are somehow too generic for them. Using a generic item can help you save money for something else you want.
Every child is unique, but as parents, it is your responsibility to advise and assist them as they begin their financial journey so that they can grow into responsible people. Whether you make six figures a month or nothing at all, your spending and saving habits will have an impact on how your children view money. The sooner you teach kids how to budget and save, the better. Remember to lead by example.