Take a Tip from Your New Year's Resolutions: Teach Your Kids about Money
Do your children get an allowance? Many do. Sometimes, they get paid additional money by doing chores around the house. These are some ways of earning money. But if the kids don’t know how to manage their money, whatever they earn will be spent very quickly. It is important we teach our children how to manage their money so it is not spent on trivial items.
There are times when kids will spend their money on some whim or immediate urge. It happens to everybody. But unfortunately, that is one way that we can run into financial problems. Taking the time to explain to your kids the negative effect of spending their money on nonessential items can help them throughout their lives.
This may be difficult, especially if the urge is very strong. For instance, a piece of candy may look enticing and delicious. But it is not necessary to have it at the moment. If the child gives in to the urge and spends money on the candy, there may not be enough money left to buy more essential items, like clothes or school supplies.
Money Is Not Never-Ending
It’s important to explain that running out of money has consequences and that money spent cannot always be easily replaced. In some situations, earning more money may be difficult or not an option at all. It’s important to explain that when it comes to getting the things wanted, saving money is essential.
Teach your children to manage budgets. Have them put a budget on the things they have to buy and try to work within the budget. They will see that their money can be spent on several items based on their budgets. They will also see that some money can be saved for future items.
Save, Save, Save
Encouraging the use of a piggy bank or even a savings account can be an ideal way to help kids understand the value of saving. You can make them want to save more money by adding money to their savings when they reach a certain amount. This will help them understand what it means to save money.
Sometimes, your kids will want items that are available at various stores. Take advantage of those time – teach your kids to compare prices. This will help them understand that buying an item when it’s on sale or at a discounted price means more money will be left in the piggy bank or savings account. Maximizing purchases helps stretch the savings.
Kids need to understand that money is a limited commodity. Teaching your children to make full use of their money through savings, budgets and price comparisons will get them off to a good financial start.
Keeping a focus on money is just one way to get the New Year off to a good start. Check out some other useful articles from Package From Santa to learn about others.