Managing funds certainly does not mean there is shortage of money. It means that one knows where to spend their money’s worth. Money management ought to be one of the few learning imparted to kids at a very young age. This would help them understand the value of money and, would help them spend the money sensibly. Debt is like watching a horror film unfold, where you can’t even scream or shout. Kids generally don’t value money much and, it is not their fault either. Parents tend to believe that it is fine to allow kids to spend the money as long as they have. That is a fair weather attitude. What about the rough patches in life? Who can guarantee that they won’t come? It is always sensible to have a talk with your kid and make them understand all that needs to be learnt about money so that even when they grow up they are sensible enough. This would help everyone stay out of debt and have money to spend. There are ways to teach kids the value of money and, way too.
Be the Early Bird
Believe it or not, what you teach matters as much as when you impart those teachings. You should make your kid understand all that needs to be understood about money at an early age itself. When your kid reaches the tender age or 8 or 9, start accepting his role as a mature person. Yes, he/she is still your baby but, they need to understand the value of money for their own good. This is the perfect time to talk to them about money and, all the good and bad related to it. If you feel you are fine with doing it even earlier, it is better. This is to avoid confusion and live life peacefully.
Explain using Daily Routine
When you go to withdraw money from the ATM, you could carry your kid along. Yes, you would feel a bit worried about what he/she would understand but, it is just the beginning. You could explain how money comes and, where it is saved and how you withdraw. All about savings can be taught while on a visit to the ATM. You would be surprised to know that kids are terribly smart and, the questions they start asking the moment you tell them would get you amazed. Interesting part is that they are fast learners even at the youngest age. You could explain them price differences, where they could shop, how they can save money while visiting a grocery shop to buy out the monthly groceries. Try taking your kid out so that they know more about how to use money.
The Monkey Effect
Have you ever seen monkeys, they replicate whatever they see in front of them. Kids are pretty much similar. They observe their parents and, learn a great deal from them. You would be amazed at the things they learn without being taught. So, try to spend money wisely when you are taking them out. Much of the money related things could be learnt while generally observing you. So, make sure you make wise money decisions and, do not treat money as trash. Else, you would see your kid learning the same.
The Allowance Method
Like you get a salary to conduct your monthly spending, you should give your child either a weekly or monthly allowance. Your kid must learn to spend on their needs using this allowance. You should not grant any extra money. This would give them a chance to manage their allowance and, to understand the difference between wise spending and otherwise. If you give them extra money whenever their allowance gets over, they would never learn to manage their funds. When they come to ask you for extra money, you would get a chance to explain debt and, tell them how unwise it is to fall in debt. Yes, there are times when parents would start feeling bad about this. But, look at it this way, your kid is learning something new and useful.
Earning the Allowance
You get a salary based on your work so you would need to ask your kid to help out in some way before handing over the allowance. You could possibly ask your kid to help out in the household chores. A run to the grocery store or helping out clean the snow gathered around etc. You need to fix certain chores for your child and, allow them to earn through it. This would give them a pleasure of earning something and, value the money even more. When teaching kids about money or debt, you need to ensure that you are not just talking about them. Practical work gives out a better idea of whatever you are planning to teach them. It would also give out a wonderful experience to them.
Need Extra Money, Work
Yes, it feels awful when your child wants something terribly but, your money teaching lessons can’t afford to give it out to him. What can be done in such cases? You could probably ask him to work an extra deal with you for which you would pay him. Ask him to do some extra chores this week and, the result would be some extra cash. Let him learn to save the money for his desires. You would be teaching him the basics of smart management through these earn money ideas. It would be the perfect way for your kid to learn this new chapter of life.
Occasional rewards when some good work has been performed by him/her would act as incentives for better work in the future. So, you could purchase a gift at times to motivate him in his learning. Motivation is indeed the key to better learning.
Don’t be scared to start too early and, don’t delay the process unnecessarily. Kids are often the best learners at an early age. You would just do fine following these few tips.