Do you remember as a child, you got small change from your mom or dad after a task or doing a good deed, and rushing to put it in your piggy bank?
That it was our first experience with money management. We saved our money in a place that we could not easily break; and when it got heavier and heavier, we broke it to use it for a good cause. Actually, money management should not stop with the concept of the saving in piggy bank.
Believe it or not, kids as young as three years old can understand the theories of spending and saving. Their money habits are typically set by the age of seven, according to a studies, which have also revealed that parents have the biggest influence on their children’s money-management habits.
That is why it is important for parents to introduce their kids with good money habits and management that can save them from making some major mistakes in the future.
Here are some tips on money management for your children.
Involve them in shopping and budgeting
You can help your kids to learn about money management by involving them in your grocery shopping and in creating monthly budgets. When you do the grocery shopping, let them take charge of the shopping list. Encourage them to choose the best products with value and use. This will teach them about planning, spending, and saving.
Demostrate good financial behavior
You need to keep in mind that children have tendency to imitate what their parents. That is why parents should showcase positive financial habits on daily basis. This includes things like shopping on a set budget, using coupons and discount offers to pay less for goods, and buying what is needed instead of what is wanted.
Saving, saving, and saving
The concept of saving to build a successful financial foundation may seem very common, but it can be difficult to implement as kids quickly become attracted to the latest items on the market. To start a saving habit, open a savings account for your child to which they contribute each week. At the end of each month, show them the account balance. This will motivate them to save more from their pocket money.
Teach them to control their wants
This is probably the hardest lesson for everyone, especially for teenage children. Parents should assist them in choosing things that they really need. So, from early age, parents need to teach them that if they want to buy something, they have to wait and save to buy it.
Let kids make their own purchasing mistakes
Even if you think your child is about to waste his money on a toy he’ll soon tire of, you might want to let him go ahead and buy the item anyway, as it might just teach him a lasting lesson. They will feel like they wasted money on toys they enjoyed only one or two times and will remember this in the future. So, just let the kids do the work themselves, let them make mistakes and learn from them.
Of course, each family can customize these recommendations in a way that fits their lifestyle and values. But, it won’t hurt if you really build the concept of “money doesn’t buy happiness” to your children. That way they will value the wealth they have, especially when they grow older later.