The best period to teach children about money management is between 7 and 10. Children have the ability to easily grasp financial basics when taught tat an early age. This is because the sooner they learn the ropes of managing their money, the earlier they will learn to use it.
The first step is to allocate a meager amount which needs to be given to the child after one week. Assign suitable odd jobs around the house which they can complete in a short period. Once the assigned job has been completed pay them their allowance in full. This way, the child realizes the value of his/her work and will want to earn more.
The second step is to show the child to spend his money frugally. The salary must be allocated to three categories - saving, charity and spending. Apportion the money as 40-10-50 or 50-10-40, whichever is suitable. Now the child learns the basics of: spending the money on favorite things, giving away a part of it to charity and finally, to save a portion of it for themselves. These simple lessons when learnt the hard way, will stay with them forever.
Visualizing a savings jar getting filled up will show how they reap benefits from their hard work; similar to, how they feel when they see sprouts from the seeds they've sown with their tiny hands. Give the child a transparent box or jar where they can put in their savings amount every week.
Values like humbleness and simple living can be taught through charity. Take children to some old-age home or orphanage so they will realize how blessed they are.
And finally, let them enjoy with their own savings. They could be allowed to buy a favorite toy or dress or video game or even use them for their outings. These simple lessons on savings will teach them to be responsible for their actions and will definitely prevent them from falling into debt traps in the future.
The first step is to allocate a meager amount which needs to be given to the child after one week. Assign suitable odd jobs around the house which they can complete in a short period. Once the assigned job has been completed pay them their allowance in full. This way, the child realizes the value of his/her work and will want to earn more.
The second step is to show the child to spend his money frugally. The salary must be allocated to three categories - saving, charity and spending. Apportion the money as 40-10-50 or 50-10-40, whichever is suitable. Now the child learns the basics of: spending the money on favorite things, giving away a part of it to charity and finally, to save a portion of it for themselves. These simple lessons when learnt the hard way, will stay with them forever.
Visualizing a savings jar getting filled up will show how they reap benefits from their hard work; similar to, how they feel when they see sprouts from the seeds they've sown with their tiny hands. Give the child a transparent box or jar where they can put in their savings amount every week.
Values like humbleness and simple living can be taught through charity. Take children to some old-age home or orphanage so they will realize how blessed they are.
And finally, let them enjoy with their own savings. They could be allowed to buy a favorite toy or dress or video game or even use them for their outings. These simple lessons on savings will teach them to be responsible for their actions and will definitely prevent them from falling into debt traps in the future.
About the Author:
As a parent, use budget planning software offered by personal budget planning websites which you could demonstrate to your kid as he grows bigger. This way, you become an ideal parent for your child, giving him financial security at all times.
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