Planning family finances and teaching children how to handle money the right way helps educate adults who can manage their financial life smoothly. And saving money for the family budget and the realization of dreams.
You may have friends or acquaintances who are or have had financial problems. This is often because these adults, children, were never encouraged to be careful or manage their own money properly.
Encouraging your children to save money will bring many benefits to their adult life. It also helps you stay on top of your family budget. This is because, habits acquired in the early years of life, tend to accompany the individual.
Not to mention that with each phase the children enter, new expenses appear. That’s why it’s important to educate them financially so that they can prioritize what’s needed and you can avoid going over budget.
Want to know more about how to teach your children how to save money? Read on and check out 6 tips!
1. Enter the universe of the child
One of the main mistakes parents make when trying to teach the importance of money for children is to speak from their perspective, bringing the child into adulthood. Children are not mini adults.
Talking about the utility bill, the restaurant bill, or household expenses generally will not make sense to the child. However, when your child asks for a new toy or birthday party, then it may be time to broach the subject.
2. Offer allowance
It is important that the child has his own money. At this point, allowance works as a way of teaching your child to administer it.
After the first talks about the importance of money, it is time to encourage them to start managing their own resources. Allowance plays an important role at this time. As a month can be a very long period for your child, you can opt for a “weekly” one.
It is at this time, too, that one of the main questions for parents arises: How much should I offer my children?
Well, there is no fixed rule for this. Family lifestyle, parental financial condition, and child’s reality will influence the decision.
The tip is: offer less in the beginning. It is easier for you to raise your child allowance, even as a reward for saving your child, than to reduce it.
It is also recommended that parents show their children the importance of prioritizing choices. For example, if the child wants to go to the movies, he or she will have to give up another program because the allowance will not cover both programs.
The important thing is to make your child understand that just as he works with allowance, as an adult, he will have a certain amount of money to use during the month and make as few financial mistakes as possible.
3. Show the importance of saving now to earn later
Teach early on the importance of saving a portion of the money for a future reward.
For example, do you know that your child’s toy is always asking for and costs $ 150? You can encourage him to collect $ 50 and you, as a reward, complete the remaining amount.
Awards and rewards are important for teaching about cause and consequence.
For younger children, a piggy bank works great. But if your child is a bigger child or a teenager, opening a savings may be the best alternative.
4. Encourage your children to write down their expenses.
Another important tip is to encourage the child to write down his earnings and expenses. This contributes a lot to the organization of family finances.
Show her how to register how much she earned allowance, how much spent and how much could save that week or month. This is a lifelong learning, and when done from the start, it is no longer boring and complicated and natural.
Depending on your child’s age, they may list their expenses in their own notebook or in an app that may be more appealing to them.
It is important that you are with your children during the first notes. So you can take this moment to teach them some basic accounts for the financial control of their allowances.
5. Teach children to spend less than they earn.
Another tip that seems obvious, but not always, is to explain to your children early on how important it is to spend less than they earn on allowance.
Show that spending beyond revenue disrupts family finances and sometimes even family relationships.
This will also help the parents themselves control the household budget. It is also important to explain concepts of conscious consumption.
Do you have children of different ages? Their toys can be shared and, when no longer used, can be donated. Thus, parents also convey values such as generosity.
6. Be an example and save money
When teaching your child about the importance of saving money, you cannot follow the maxim of what I say.
Children learn a lot from example. Seeing parents controlling the family’s finances, the child realizes the importance of conscious spending.
Parents can share the family budget with their children. This way, everyone will know the family’s financial reality and can contribute to household expenses or at least to reduce high bills, for example.
Many parents, because they do not see the importance or have not had these teachings, end up neglecting this teaching. Maybe because they think the kids won’t understand the financial concepts. Therefore, it is worth remembering again the need to adapt the language to your child’s age.
Whether through games and play with children or by assigning responsibilities to teenagers, the important thing is not to leave such a serious matter aside.
Now that you know how to encourage your kids to save money, share this post on your social networks! Show other parents how they can act too!