Many parents are not particularly inclined to discuss their debt and finance related issues with their kids. As an invariable result, kids remain unaware of crucial financial factors like debt management, savings, account dealings and face severe difficulty to handle these matters in the long run. There are certain skills and habits which every child needs to learn and develop from an early age. Financial discipline is one of them. If your kids come to know how to effectively spend, save and survive today, they can surely attain a better financial future tomorrow. Follow the instructions given below and provide your children the basic knowledge required to stay out of debt in future.
- ‘Children need models more than they need critics’. The first lesson of money management to kids starts when their parents are not even aware of it. Kids follow the footsteps of their elders blindly. Manage your finances well and spend your money wisely to set a perfect example to them. To stay out of debt spend within your limits. To teach your kids the difference between wants and needs, live frugally. Being frugal does not mean spending no money at all; it means think before you buy, and wait to buy until you can afford it.
- Discuss your financial issues with your children. No matter how complicated your financial status are, attempt to make some simple bed time stories with them. Do not evade or ignore any of their queries, answer them clearly. Show them how you pay your due bills and how the ATM, checking accounts or credit cards works.
- Make your children financially responsible by letting them spend money on their own. Of course, you are there to guide them but, make sure your child grow up making some of their own financial decisions as well. Let them commit mistakes and learn the lessons from them. If needed, confide in them your financial blunders in the past. In this way you may not be able to stop them completely from making any mistakes but at least they will be less likely to repeat these mistakes as adults.
- Take into account your kid’s feedback and suggestions while you are planning your budget. This will give them an overall idea about the price list and monthly expenses. Make sure it should not make them feel guilty or upset for costing you so much.
- Young kids love to collect and save pennies, present them with a piggy bank to indulge in this habit. For teen kids you better open a savings account and let him watch it grow. It will generate a sense of interest and excitement in them and they will put more efforts and hard work to save in these accounts. Excitement and anticipation both are essential to make your child keener to save money.
- Start giving your child a weekly or monthly allowance from an early age. Instruct them not only to manage their weekly expenses within limited means but also to save a portion of it. Trigger their emotions by teaching them to donate a portion of their savings to people who are less fortunate.
All these above mentioned points are lifelong ways to teach your kids about money management. When your child becomes old enough to ask for toys or candy, it means they’re old enough to learn some lessons of financial awareness as well. As soon as they learn to count, you can start imparting your basic lessons about spending and saving. Remember the sooner they learn these lessons and apply them to their lives, it is better for their financial well being.
