4 Things to Teach Your Kids About Money
Many parents struggle with the concept of teaching their kids about money. How are they supposed to give their kids the financial background they need while still allowing them to simply be kids? By teaching your child key financial lessons early in life, however, you can instil a sense of financial responsibility that will stay with them for years to come.
1. The Value of Savings
It might not seem fair to make your child put away a percentage of his $5 allowance, but teaching your child to save early will help develop great financial habits. Help your child learn how to save up for big purchases, including purchases that they might want to make in the future.
2. How to Give
Some children are naturally more generous than others. They may be inclined to give away money or possessions randomly instead of holding on to them. Teach your child how to give responsibly, encouraging generosity without leaving themselves penniless. Also, teach your child how to recognise the difference between a friend who really wants to spend time with them and a “friend” who just wants to take advantage of their generosity.
3. How to Budget
Many kids–especially as they enter the teenage years–develop a habit of asking mum or dad for money every time they want something. Even if they receive an allowance of their own, they simply assume that their parents will take care of anything they really want or need. Teach your child early how to budget, from setting aside some birthday money to cover a coveted toy later in the year to preparing for an upcoming event by keeping money set aside for entrance fees, food and drinks, or souvenirs. If your child doesn’t remember to save the money, don’t bail them out at the last minute! This may be a valuable lesson that will serve them well later in life.
4. How to Recognise Value
Kids in toy stores are dangerous — especially if they have their own money to spend. Many children struggle to recognise the difference between a valuable purchase that they’ll use for years and an impulse purchase that they don’t really want. Teaching your child the value of the items they’re considering — and how to choose wisely — is a great budgeting lesson that will help them develop the self-discipline they need as adults.
Financial management is a difficult concept that many adults struggle to master. If you’re having financial difficulties that can be fixed by a short term loan, contact us today!