Teaching Kids About Money
The topic of money is a controversial matter, just like other divisive subjects you can discuss with your kid. Nevertheless, you must get by such topics since you must equip your young one with knowledge on how to handle their finances.
One determinant of future success is sound monetary skills which many parents struggle to impart in their children. Teaching kids about money, however, is not a straightforward matter. Ideally, you should use techniques that suit kids in different age brackets because they tend to have different abilities as they’re growing up.
Children in this age bracket are not able to work on complex math problems yet. Therefore, you should instead give them basic lessons about money management. Teaching them how to earn money and save is a great way to start them off.
Since kids aren’t allowed to go to work like in previous years, you can assign chores around the home. Also, ensure that you get a piggy bank which they’ll constantly drop in whatever they ‘earn’ from their tasks.
Once they get into the saving culture, they’ll be happy to drop in other monies that they come across, like Christmas cash gifts and birthday allowances.
Kids in this stage will have greater attention and are likely to consider breaking their banks. You shouldn’t let them head to the store on their own because they’ll probably blow all their money on needless items. Instead, accompany your child to your local grocery store and demonstrate how to make sound purchases. You should teach your child to spend their hard-earned cash smartly to get maximum value for their cash.
With time, give them enough space to operate independently. Therefore, instead of shadowing them, give them a shopping list when they are going to the store.
Your biggest worry when kids hit their teenage years should be cheap credit. They should first understand that they should only buy what they can afford at the time. While credit is a useful business tool, children are not ready for the responsibilities of debt repayment or any resulting penalties.
On the flip side, you can give them a debit card with a determined amount of money. After that, teach them careful spending while being keen on how much money they have left on the card. They will then enjoy the convenience of plastic money while learning how to be reasonable spenders so that they can set aside some money for their savings.
At this stage, most teenagers can get a part-time job that earns them a few dollars in wages. The best way to help them manage their money is to give them some responsibilities around the house. The aim is not to offset your burden but rather inculcate a culture of responsible spending. Moreover, they’ll quickly learn how to budget their money and allocate funds for different bills and save the surplus.
It will take time before your child learns the art of managing money. Nevertheless, it is worth the effort and time because they’ll end up as responsible adults who will avoid the pitfalls of poor financial decisions.