fbpx

Learn It To Earn It! Money Management For All Ages

October 17th, 2016 Posted in Uncategorized
No Comments

financial-fairy-tales-baby-with-money

flickr

It is astounding that with the amount of focus that we place on money, as a society, that money management is not taught in all schools. When we look back on our youth, we never thought of money as important at all. In my 30’s I look back at just ten years ago and didn’t view money as all that important! As the magical overdraft would help me get my cash from the machine and the credit card as free money. In hindsight, this was a bad attitude to have. As I now have mounting debt that I could do without. The pressure to do more grown up things becomes more apparent. Buying a house, planning a wedding, the increase in fuel costs. These are all things that are tagged with the notion of being an adult. The shock of money responsibility just seemed to be slammed down in front of you as soon as you left university or gained full-time employment. So is there a way to help bridge the gap between a child and adult when it comes to money management?

Toddlers
When it comes to teaching toddlers the value of money, the best approach is to use a visual stimulus. The typical method is to use a piggy bank, which is an excellent idea in theory, but the child can’t see the money amounting. So the fruits of their labors go unnoticed. Seeing a jar fill up with coins and talking to them about how much more they’ve got than yesterday is a nice way to reinforce the idea of saving.

Young Children (8 and over)
The best method for young children and tweens is to let them make decisions about their choices in terms of what to buy. For example, if they wanted two items but can only afford to buy one, they need to make the decision. If they are unhappy with the outcome, then they have made their bed and must lie in it.

They also need to learn at this age that money is earned, not just given out. A simple method of teaching this is to reward them for doing household chores. Based on the task, you can give them more or less money. That way, the concept of pay grades is also introduced.

financial-fairy-tales-sack-of-money

image from Flickr.com

Teenagers
If you have been able to reinforce some of the previous values at certain stages of their life, then helping them get a bank account is the next logical step. Having their own bank account that they can withdraw money from and are solely responsible for will teach them how to manage their money. If your child hasn’t got a bank account yet, you can apply for new bank account here now. And, as a consequence, if they run out of financial resources, they would need to get a job. That marks their first foray into adulthood.

All ages have their own attitude towards money. So in teaching them the value of it on a level that they can understand, whether by visual stimulus or making sure they know the repercussions of overspending, it will go a long way to instilling the values and responsibility of money management.

, ,
Read More

Useful Tips For Financial Success From Parents To Their Kids

June 2nd, 2013 Posted in kids and money, learning about money
1 Comment »

Management of finance is an important aspect of one’s life and as parents, you should make sure that your child starts learning about it from a very young age. Listed below are a few steps that you can take to teach ways of effective financial planning to your children.

Financial success - teaching your child about money image

1) Use the piggy bank method

It is perhaps the most interesting way by which your child learns about money management. There is no point in telling him about the usefulness of saving money, or about the ill-effects of overspending when he is too young, for instance 2 to 5 years old. Therefore, use the piggy bank. Give him a dollar or two each day and ask him to deposit it in the bank. As he is rewarded with a large sum of money at the end of the month or so, he automatically will be inclined towards saving more for the coming days. Therefore, the first lesson of financial planning, i.e., the “usefulness of saving” is learnt.

2) Set Financial Goals for him

As your child grows a little older, say 7 or 8 years old, start setting short-term financial goals for him. Continue giving him a certain amount of pocket money and ask him to save up for an expensive toy or a short holiday trip that he wants. In case of the holiday trip, you can ask him to save enough money so that he can sponsor the lunch at one of the most well-known restaurants of the place you are visiting. Setting short-term financial goals from a young age always helps. In this manner, your child is slowly prepared to set long-term financial goals (like higher education) and save money accordingly.

3) Show Them the Way

Only setting monetary goals and asking your child to work on them will not be sufficient. You have to guide him as well. For instance, if you are asking him to save up for a bicycle, keep dropping hints on how he can cut down on his expenses. Ask him to cover the way to school on foot (if he can) instead of taking a cab. He does not really have to live on abstinence. However, you can definitely advise him to cut down on his entertainment costs, or his expenses on food (keeping in view that it does not harm his health) until he buys the bicycle.

4) Prioritization of goals

When your child reaches his teen, you should gradually start teaching him about the importance of prioritizing his goals. He might have got whatever he wanted as a little child but now is the time to bring about a change in his thinking. In future, there will be times when he will have to make grave choices as far as fulfilling his own wishes are concerned, for instance between an expensive car and an equally exclusive holiday trip. Therefore, start preparing him for these types of situation in life. Advise him to spend wisely. Today, if he is given a choice between keeping aside some money for his higher education and spending the same amount for a short trip with friends, he should be able to judge which is more important for him.

5) Career Tips

As parents, you possibly can’t decide the career path to be chosen by your child. It will depend on his choice, talent, and his ability to make the most of the opportunities presented to him. All you can do in this case is motivate him to follow his dreams and make sure that he gets the right kind of training that is required to transform his dreams into reality. But it would be advisable if he understands that he should choose a career that is fulfilling (in terms of job satisfaction) and lucrative as well. Only saving up money for future will not do. He should earn sufficiently as well to invest in profitable schemes so that his savings are doubled or tripled.

Marie Nelson is a passionate blogger with expertise on financial matters. The global economic crisis has been the subject of most of her recent write-ups and at present, she is writing exclusively for United Finances.

, , ,
Read More

6 lessons to teach your kids how to stay away from debts in future

March 1st, 2011 Posted in Uncategorized
No Comments

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.

 

, , ,
Read More

Money management – attitudes start at home

June 29th, 2010 Posted in Uncategorized
No Comments

In the wake of the economic situation, Credit agency Equifax believes that it is more important than ever that future generations are taught financial skills. This belief is reinforced by the findings of recent research* conducted by Equifax amongst parents, where 35% said they don’t think their children have a good understanding of the value of money and 94% believe financial education should be part of the national curriculum.

“Young people now live in a world where debt is a fact of life and research has found that student debt has topped £5,000 for each year of study” says Neil Munroe, External Affairs Director for Equifax. “This makes it absolutely imperative that, as early as possible, young people understand how best to manage their finances. It is therefore very encouraging to see the work of My Money Week, which aims to help schools teach children more about managing money in a way that is practical and relevant to them.”

More than a third of parents who responded to the recent Equifax research on finances amongst young people, believe that their children have a good understanding of the value of money. But almost the same number think this is not the case. When it comes to children’s understanding of money management, 73% of parents said they felt their own parents’ attitude to money and finances had influenced how they now manage their finances.

“Clearly the right attitude about money management starts at home” continued Neil Munroe. “But we believe the school curriculum can play a very important role in preparing young people for the challenges of the 21st century. And that includes being in control of their finances and managing debts more effectively than the generation before them.”

, , ,
Read More
Newer Entries