Many parents fail to teach their kids about money management.
Given the fact that you’ve already learned from your mistakes and don’t want your kids to repeat them, here are a few ways you can make your kids practice effective money management to grow up as sensibly-spending individuals:
Teach Kids to Save Money in a Clear Jar
This is great for kindergarten kids. Even though piggy banks work fine, they don’t offer any visual, enticing factor for kids. By making use of a clear jar to save pennies, you can show them how spending less and saving more can grow money. Show them how a week back they managed to collect $5 and a week later, it’s $10. Talk in a manner that emphasizes on it being a big deal.
Set an Example
Remember, kids are amazing observers. They notice every little thing you do and try to imitate your habits. If they see you spending big bucks every time you go out or buy unnecessary stuff from the grocery store, they will notice. If you and your partner argue about money at the end of every month, they’ll notice that too. So, set a desirable example for them – they’re more likely to be what you show to them.
Explain the Concept of Opportunity Costs
As your kids enter their teens, explain them what opportunity costs are. It’s like telling them how buying a video game means that they would have to give up on the pair of shoes. This is a very critical stage for your kids to take decisions and realize that every decision has a result which can be both, positive and negative.
Money Management is Also about Giving
While your kids realize how important it is to sensibly spend money, explain to them the concept of giving. Ask them to choose a church or a form of charity to help out those in need, with money.
Make Them Responsible For Bank Accounts
When your kid reaches late teens and early adulthood, explain how a bank account is operated.
This is more beneficial if you gradually come to this level, following the practices stated above. This particular practice will take the concept of managing money to a whole new level. When they learn how to operate basic accounts, it will be far easier and uncomplicated for them to take care of heavier accounts as they grow older.
However, there are instances where you fail to manage your funds and land in a financial crisis. If that’s exactly where you are right now, this is the right place for you.
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