How To Instill Good Money Management In Your Kids

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One of the most important parts of parenting is instilling good money management skills in your children. Although kids don’t physically handle money until a later age, they can develop useful skills that last a lifetime if you teach them valuable lessons as they grow. Here are a few ways to teach your kids how to manage their money well.

Create Budgets
It’s never too early to help your child learn how to manage their personal money by creating a budget. Consider creating a chart that your kids can follow where they can see how they should divide their money each time that they’re paid. Part of their money can be used towards saving with another portion used towards giving, whether it’s to their local church or an organization. A portion of the money can also be spent on toys or activities that they enjoy. By understanding early on that not all of their money should be spent on themselves, they’ll be less likely to spend everything they have on unexpected purchases that aren’t planned.

Piggy Bank

Help Kids Avoid Impulse Purchases
Kids don’t always understand the importance of waiting to make purchases. They often act upon impulse and would buy everything in the toy store if they could. Set the example as their parent by showing them how to avoid impulse purchases. Discuss the importance of saving money and how you have to put money aside to purchase new furniture or plan for an upcoming trip. Discuss how important it is to take their time saving for big-ticket items and how rewarding it is to wait instead of getting into debt. If they see that you have patience with saving and don’t buy items that aren’t on your list at the store then it won’t seem like a normal habit to your kids.

Give Allowances
Once kids begin to understand money and how it’s used, you can begin to give them an allowance each week to help them learn how to manage their own money as they grow up. Require certain chores to be performed around the house to ensure that they earn their allowance instead of getting it for free, which can cause them to have a lack of appreciation for each dollar that they receive. Younger kids can perform chores that include making their bed, cleaning up their toys or feeding pets. Older kids can earn an allowance by raking the leaves in the backyard or washing the dishes. Use a sticker chart to track each chore that is completed, which can determine how much they’re paid based on their hard work. Not only will they appreciate the money that they’re paid, but they’ll also develop a great work ethic in the process.

Start Early
Implementing good spending habits and money management in your children should begin at an early age to ensure that they have plenty of time to develop the right skills. There are many ways to teach young children. Start by the age of five when they know how to count and are mature enough to begin keeping track of their own money. Start by using coins that they earn before moving on to dollars as they prove that they can handle their money properly.

Use Visuals
Children learn easier with visuals that are used, which can allow them to see a picture of what you’re trying to teach them. Use a chart when it comes to explaining how they should manage their money with images that represent savings, giving, and spending. When preparing them to save, consider using a jar that has a line on how much they need to put aside before they can afford a specific item that they want to purchase. You can also implement a receipt scanner so they understand how much money they spent total. Many receipt scanners offer visuals so you can determine where you are spending the most money. Visuals will make the concepts easier to understand and can allow it to be a fun activity as they track their savings.

Discuss Prices
Make a game out of going to the grocery store to ensure that your child understands how much the essentials cost. You can review prices and add up the total before getting to the register. Using coupons can also allow them to understand the importance of saving money instead of paying full-price.

There are many ways to get creative when teaching your children how to manage money correctly. By creating fun activities and rewarding them for their hard work, the lessons will carry on into adulthood and will prove to pay off.

 

Author Bio: Paige Jirsa– I work with┬áTop10.Today, a shopping comparison site, where we strive to help consumers find the best quality and priced products.