Budgeting and being responsible with money may not be fun, but it is essential to get by in life and be able to manage your finances. Due to this, it is vital that you help your child learn about budgeting, even from a young age – if they do find themselves in debt trouble, they can get useful advice from Creditfix regarding budgeting and debt. However, here are some helpful tips to teach your kids about money management before it gets to that stage…
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Budgeting lessons can start at a young age. When your child asks for an item from the shop, but doesn’t have enough pocket money, you could help them create a savings jar. When your child is little, it might be helpful to keep saving simple, and fairly easy, to help motivate them. Something as simple as telling them they need to earn five coins, and that they already have two, can spur a child into learning the importance of saving, as opposed to spending money simply because you have it. Children as young as 2 or 3 years old can understand the basics of money. You can also turn budgeting and saving into a game to keep them engaged.
You may also wish to allow your child to earn money by helping out with age appropriate chores, which can also instil a good work ethic that will be useful in adulthood.
School-age children can learn more about budgeting and saving. It is at this age that you can start teaching your child to avoid impulse purchasing. Impulses can be fun, but they can also lead to debt. Instead, explain to your child that it can be better to wait a few days before returning to buy the item. This will help to avoid any spur-of-the-moment decisions or spending money for the sake of it, and help them ensure that the item is definitely something they will want and appreciate.
When your child reaches their teenage years, you might want to involve them more in your weekly or monthly budgeting. This will allow them to gain some real-life experience in managing money and a household. They will be able to see how much of an income is eaten up in bills and other essential spends, as well as that you can’t blow your wages when you receive them simply because the money is there. They may also end up appreciating the work you do, and the money you spend, simply to keep a roof over everyone’s heads and food in people’s stomachs. This discussion can also be used alongside other discussions, such as the importance of education to being able to gain a well-paying job.
Overall, teaching your child to budget is incredibly important. Sadly, it is a lesson that is often not included, both in the home and at school. A child who knows the value of money is less likely to find themselves in financial difficulty, and more likely to have a healthy relationship with money in adulthood.