5 Simple Ideas You Should Teach Your Children for Smart Money Management
Just because your kids are still young doesn’t mean that they shouldn’t have anything to do with money. Teaching your kids how to manage money when they are still young is a good idea. Children tend to understand a lot of concepts when they are younger, so they should be taught early enough. Therefore, as they grow up and start handling money, these ideas will still be in their head, and they will be able to do it effectively.
1- Teach them to Differentiate Between Wants and the Needs
The first concept that your children need to know about money is what they need to use it. Ensure that you teach your children that money should be used to get their basic needs. Some of the basic needs that your children may need include food, shelter, and clothing. Therefore, inform your kids that once they get money, they should consider their needs first. It would be best to let them understand that if there is extra money after getting these needs, they can now get their wants.
2- Train them How to Save
Saving is one of the best cultures of money management that you can teach your children. Ensure that your children understand that not all money that comes in has to be spent. A portion of the money should be saved to be used for other important reasons such as investment. While you inform your children about saving, be sure to let them know that it is essential to have a saving goal. Here, your children will know for what purpose they are saving and how much they intend to achieve.
3- Use of a Prepaid Phone
Many children tend to spend a lot of money purchasing airtime for their mobile devices. Ensure that you teach them about prepaid bills where your children can get minutes and a lower cost. Also, with prepaid phones, your child will be able to regulate how they are using them and this ensures that don’t spend a lot of money.
4- Show Them How to Earn Money
You can’t teach your children to earn money that they don’t have. As you teach them how they are supposed to manage their money, give them ideas on some of the appropriate ways to get the money. In some cases, it would be a good idea if you supported them. If your child has a passion for something, find the perfect way to convert that into a way they could earn from it.
5- Don’t Go for What You Can’t Afford
A good idea you should give to your child is that they shouldn’t buy what they cannot afford. Your children, just like every other kid, feel that whenever they have money, they can buy what they want. Ensure that you tell them that is not how it works. Inform them that they always need to spend lower than what they afford. In some cases, your children shouldn’t buy what is expensive for them as that may leave them in financial distress.
Money management is a skill that you would want your child to have. It won’t be a good feeling seeing your grown child running into financial problems, and that the reason is that your failure to teach them. Ensure that these skills are carefully instilled into your children so that they can be good at handling money.