Among the benefits associated with teaching children money management is how such habit tends to transform into worthy skills in planning for future expenses. The few children who were not taught the money management lesson suffers the consequences for a long time, if not for their entire lives. Some parents believe only the rich are to teach their children about money. They often felt the teaching as not being necessary since they don’t have much of what they want to talk about with their children. Regardless of what the parents earn, it is important for the children to know how best to manage their money.
The basics of managing money from a tender age should include letting the children know the value of money and to cultivate the habit of saving which is the most important aspect. It goes beyond just that. Children can also learn how to differentiate money usage the positive way, from the numerous negative ways. They need to be fully aware and prepared that conflicts caused by money often arises. Every opportunity that involve saving and spending should be seized to teach the children about what they are meant for and sources where such incomes are generated. It is also important for every parent to state to their children that all money spent on their toys and up brings are being worked for so they wont see the availability of money as another kind of magic.
Below, I have provided some guidelines and useful suggestions for parents to teach their young children effective money management strategies.
Money Management Strategies for Children
Parents should encourage their kids to start making deposits of parts of what they get. This is a good start as it provides them options when an unforeseen situation pops up. First, help them get a strong piggy bank where they can make local deposits on their own. Naturally, they get to know that by adding new deposit, their money increases. Withdrawals would be based on their readiness to destroy the box.
Another way to encourage your child to save is when you notice your child’s interest for a particular item. Discus with your child that one of the easiest ways to get that item they craved for is to get their savings to a certain level so they can get the things they want.
Test And Compensate Them
You might like to put them to a test by making them complete a set task. Promise to compensate them accordingly after a successful completion. This prepares them to always want to work and earn more to increase their savings.
Help Them Differentiate Between Need and Want
Like you already know that there is a difference between need and want. Explain to your child that expenses should be channel on the basic things first. Basic needs, like rent and food before going for extra requirements which doesn’t really have an effect if they are not met. This is essential to having and building a good money management habit
Help Them Create A Budget
Be strict and consistence when it comes to the issue of making payments for them. There are some expenses or bills your child is entitled to settle on his own. They become dependable when you keep bailing them out of every financial roadblocks. Help them create a budget so they know how best to allocate their money.
Encourage Them To Get A Job
The most valued money is the one you worked for. When your child get paid after working for a couple of days in a warehouse or restaurant maybe, planning how to manage and spend their money become more meaningful. They duel on the fact that another income won’t come in if they mismanaged the one at hand. Also, remember to discus the risks associated with getting a job outside the home, including the financial risks and the responsibility.
When you teach your children about money, they equally learn about family and responsibilities; morals, values and attitude. You are on the verge of building an intelligent kid who will be able to set priorities and goals and make a very good decision on his own.