The pandemic has resulted in millions of parents around the world scrambling to find ways of entertaining their children such as home schooling, baking, arts and crafts, and various other activities. However, with finances being extremely tight in many households because of parents not being able to work, this can also present an ideal opportunity for them to teach their kids more about the household budget and finances in general.
Below are some easy ways in which you can teach your children how to manage their money.
Help them Set Savings Goals
Helping your child to set a savings goal for that must-have toy or video game will teach them that nothing in life comes for free. You can allow them to earn money by doing additional chores that aren’t part of their daily routine if they need to earn extra cash to save up for the item they want. If you can afford it, offer to match the amount of money your child saves.
Once your child achieves their financial goal, it will help them see the benefit of saving a portion of any money they earn going forward. This will also help set them on the path to long-term financial security when they are adults.
Make Use of Money Apps for Kids
As more and more banking and other money-related services move over to digital platforms, children are being exposed to fewer physical checks and cash money. However, there are several fun and child friendly money management apps available that can help teach them about spending, saving, and investing wisely from a young age.
Don’t Underestimate your Child’s Understanding of Finances
Although your children may be too young to start investing money on their own at the moment, it doesn’t mean that they don’t understand anything about finances.
Children as young as three or four years of age can start being taught the basics of how to use and save some of their money. In many cases, you can open a Junior ISA for your children so that they can familiarize themselves with the ups and downs associated with investing money over time.
Let them Assist when Compiling your Budget
At present, money is extremely tight in millions of households across the country. This means that budgeting the little money you may have more important than ever.
Letting your children assist with compiling your household budget plan will allow them to see what items such as mortgage payments, utilities, and groceries really cost compared to the amount of income you currently have to work with.
Another great way to teach them about saving money is to encourage them to find ways to cut expenses around the house. You could even turn it into a contest to see which child comes up with the most ideas or even the most unusual money saving tips.
If you’re keen to teach your children more about financial matters and are unsure how to go about doing so, contact one of our professional advisors today.
It’s no secret that the earlier your kids are taught how to save, spend and invest their money, the better money managers they will become as they grow older. This will enable them to live independently and manage their lives far better over time as well. Here are a few compelling reasons why you need to start teaching your kids about money as soon as possible.
It Helps them Develop Good Money Habits
A study undertaken by the University of Cambridge noted that in most cases, a kid’s money habits are solidly formed by the time they reach the age of seven. This means that if you are whipping out the plastic to pay for everything from groceries to clothing to school supplies, your kids will think that it’s OK to make all of their future purchases on credit. However, your kids will notice just as much if you are paying cash or using a debit card for purchases and in most cases, they will follow suit as they become older.
They Learn to Earn their Money
Many parents make the mistake of simply handing out allowances without expecting their kids to do any work in return for the money. This not only creates a sense of entitlement over time; it will not show your kids that that they have to earn any money they receive when they become adults. Instead, it’s recommended that allowances be linked to chores that are over and above those that they perform regularly.
They can Learn about the Dangers of Credit Card Misuse
Once your kids turn 18 years old, companies offering them credit cards will inevitably hound them. If you haven’t taken the time to teach them how to use credit cards responsibly, they could find themselves in financial dire straits within a very short time.
They can get a Head Start on Investing their Money
Kids who are taught about money and how investments work from a young age stand a far better chance of being able to manage their funds, as they grow older. If you are actively investing money into various platforms, there is no reason why you cannot teach them how these can be used to enable their money to work for them over time in the form of compounding interest.
They can Practice Setting up a Budget
It’s far better to have your kids learn to budget and make their money mistakes while they’re still living under your roof because financial errors that occur once they’re out on their own will cost them dearly. Providing them with an app such as EveryDollar will not only help teach them to budget even the smallest amounts of money; it will do so in a way that they enjoy – by means of using a phone app.
If you have kids and would like to teach them how to master their finances from a young age, but aren’t sure where to or how to get started, contact us today. Our team will be more than willing to assist you.Continue reading