Kids want money as soon as they correlate how adults use money to purchase the things they want. They begin to get big ideas on what they’d like to spend money on. The only problem is that kids aren’t exactly trained in the fine art of money management. When left to their own devices, they would spend their money the same day they get it. This leaves many parents searching for “tips to teach your child to manage their money”.
How to teach your child to manage their money
When it comes to teaching children money management, we need to be able to do so ourselves. If you have not recently checked your incomings against your outgoings, you may wish to take stock now.
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Set the Example: Save alongside your child
One of the quickest ways for your child or children to learn about money is by copying your example. Together, choose a monthly savings target. This can be anything from saving for a day out, family activities, art equipment, or even new clothes. Whatever the target, make sure it’s something the child wants.
Each week, let them choose between spending money on things they want or saving the money to hit their target. Expect a few slips ups, but use these moments to teach. Spending money now means waiting longer for other items, or missing out on that goal all together.
Money is Earned
Teaching children about the value of money begins at home. This is useful because it just so happens that many tasks are waiting to be completed at home. Your child can complete chores in exchange for pocket money, showing them that money isn’t free.
Chores could include loading or emptying the dishwasher, vacuuming the carpets, or washing the car. Prior to starting this process, make sure to determine allowance amounts and how much can be earned.
Open a Savings account
When it comes to saving money, you have to put it somewhere. Piggy banks are a great way to visually teach your child about money. Savings account are the next step up.
Opening up a savings account for your child is a great building block for future financial success. From an early age, your child will have access to all the tools and apps their bank offers manage money. As they grow up, they can work with their back to understand stocks, bonds, and possibly open investment accounts.