The most important commodity which makes survival possible is money and children should be trained from a young age to be financially sound. You must be aware of many examples of how kids get into bad spending habits in their childhood then tend to retain this attitude for the rest of their lives. Mine as well as your kids have now resources and reach of the kind you couldnât even imagine in our childhood and hence it is difficult to keep a track of their spending activities. But, if you inculcate a sense of respect towards money, you could successfully be able to curb your childrenâs spending.
1. Set an example
A study has proven that children learn more from observing their surroundings. If you want your children to value money, it can be only possible through your actions and not words. If you keep on nagging your children to save money and also keep on atrophying money, your children would become confused with the ambivalence. So discuss savings and options and show them examples.
2. Encourage them to earn money
Encourage your children to earn their money rather than just giving it away to them. If you have small kids, encourage them to earn money through small initiatives like a lemonade store or a car wash or through some community service. Car wash or lemonade stands are a great way for siblings to bond and learn to share responsibility as well as revenue. If your kids are a bit older, then the lemonade stand idea wouldnât work with them, so you could do a garage sale. Ask your teens to arrange a garage sale and get rid of unused stuff to earn a good profit. In our house we have kids do the monthly household chore and if they do that properly they are rewarded. Every month is an different schedule, but money comes into it.
3. Teach them to save
Teaching kids to save is not a very easy task these days, what with so many distractions around. You could buy piggy banks and other saving toys which encourage money saving in a fun way for kids. For teens it could be recommended that you make them aware of money saving by helping them set goals. When my son wants to buy an X-Box game, promise him a certain amount of money, that he will have to save and collect the money over a period of time to buy his toy. In this society where everything is now, it is challenging but rewarding if we teach them such skills. Such goal setting tactics are very useful in adult life when you have to set savings goals for paying your loans and mortgages.
4. Let them partially take care of their finances
The pocket money system is the best way to teach your kids money management. Pay them a fixed amount of money for their spare expenses and ask them to use it wisely over the month. Get an promise that they will let you know where they have used it. Have an honest discussion on what better could have been done with that money. This would be helpful as later in their life they would have to take care of their finances with the monthly salary they draw.
5. Delegate bank and bill payment responsibilities
They wonât understand the system unless they become a part of it. Make your children a part of the banking system and the bill payment system from a young age as it would make them more aware of the bigger picture. Most kids have the impression that swiping credit cards is what gets you things and hence it is necessary for parents to make them aware of the entire system.