Do your children think money grows on trees? Do they observe you pulling out your credit card for all kinds of purchases? Do they play games online and buy accessories or add-ons for avatars? It is quite reasonable why your kids hold onto such a cliché, leading them to believe they can purchase anything they want without paying for it. The belief about waving a plastic card to purchase things is a severe problem. Therefore, teaching your kids how to manage their money requires you to lean onto some good practices. When and where do kids learn about money-related issues, including financial responsibility, budgeting, saving, debt, and credit? Although some children learn about it in school, studies show that most children learn money management skills at home. Therefore, as a parent, you need to act proactively and make substantial efforts to teach your children about money. In today’s article, we will give you some practical tips. Read on! Your children must learn and practice money management. Teach the following habits daily to prepare them for “real” life. You can include these lessons in day-to-day errands or activities. However, you don’t need to take more time out of your schedule. 1. Discuss Needs and Wants Discuss with your kids the differences between needs and wants. Your children can avoid many financial challenges if they understand it is impossible to accomplish everything they want in life. Similarly, teach your kids that some things hold more importance than others. Teach your child how to prioritize things to achieve money management goals. Prioritizing can help your child make informed decisions daily, specifically about money management. 2. Teach the Value of Working for Money Financial experts recommend helping your children understand the concept of money management. For instance, tell your child that there is no such thing as free breakfast, lunch, or toy. If your child wants something, teach them about earning and saving money to buy it. At the same time, let your children know the concept of debt and ensure they understand purchasing things without going into debt. Teach your children the value of working for money. For instance, they can do additional chores around the house or get a job, such as a paper route or babysitting. 3. Get them Involved in the Family Monthly Budget Include your adolescents in the family monthly budget process. Make a list of all your income and ask them to develop a list of expenses, including food, rent, mortgage, car payments, car maintenance, insurance, clothing, etc. You can use past credit cards or bank statements to analyze the amount of money you spent on these items in the past. Ask your children to calculate the difference between income and expenses. Remember, this is an excellent monthly activity that can prepare your children for building their own budgets. 4. Give them Personal Allowances Giving all your family members a personal allowance is an excellent way for your children to manage their money. These allowances may or may not tie to chores. If your children want to buy a toy, food, or anything else not planned in the monthly budget, allow them to purchase it or save for it with an allowance. Explain to your child the significance of buying an item with the saved money. It may take some time for your children to comprehend that they can’t have anything else once they spend the money. However, they will learn about it eventually if you avoid giving into cries for more money. 5. Don’t Rescue your Children Many parents do not resist the urge to rescue their children. Remember, this is a mistake and may lead to complications, especially about money management. Let your children stick to what you said about wants and needs. Although it is challenging for your children, especially when other shoppers surround them, it will help them learn how to control money flow. The purpose of teaching teens about money is to help them learn about avoiding unnecessary debt in the future.
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AuthorHi! I am Tim Connolly and I am providing help to parents to bring up their children in a healthy environment. I am working in this profession from last 5 years, if you have any query regarding this please contact me. Archives
June 2021
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