“Money doesn’t grow on trees.” – This is something we have been growing up hearing. Yet not all of us know how to manage our finances smartly.
Money management is something that should be learnt right from a very young age. In fact, even small children figure out how to handle money by watching their parents. Setting a good example is very important if you want your kids to learn the right way of managing finances. Nevertheless, here are a few tips smart parents of today can use to teach their kids how to handle money:
Let your child make his own spending choices
Giving your child an allowance is a habit every parent should adopt early on. Your child has to understand how to use money to buy the things that he or she wants. You can fix a small weekly allowance and raise the amount on every birthday of your child depending on your budget and your child’s spending needs. Encourage your child to plan purchases in advance, teaching him or her how to prioritize needs and wants.
Encourage your child to earn money by helping around the house
Give your child an opportunity to earn some extra income by helping around the house. You can fix rates for each chore that your child can do. Apart from helping him or her earn money, this will also make them feel a part of the family.
Give him an allowance to learn how to manage money
Learning how to manage money is very important for everyone, irrespective of their age. Giving an allowance will encourage this learning in your child. He or she might make a few small mistakes while doing so; but these mistakes are far better than the bigger mistakes one is likely to make later in his life if proper financial management is not taught early on.
Teach your child to save money
You can set up a piggy bank or even a bank account for your kid to help him or her learn how to save money regularly. Monitor savings and help the child set goals for using the money. You can also help the child to identify ways of helping others with the money that he or she has saved. This will help your child to discover and experience the satisfaction of sharing.
Help your child make choices
Making your child a wise consumer is your responsibility as a parent. Before your child buys anything, help to review alternative ways of spending the money. Teach him or her how to compare shops for prices and quality. Educate about the ways that the advertisers use to persuade people to make their purchasing decisions.
Fundry Capital offers more tips on teaching better financial management to your kids. Read here to get even more tips.
If you are in the habit of planning your budget to pay your bills and take care of your major expenditures, make it a point to involve your child in your financial planning. Let him or her see how you make your affordable choices. Give him a chance to participate in family decision making.