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.
If there’s one thing that’s true when it comes to kids and money, it’s that kids often let those bills burn holes in their pockets. However, with a little bit of encouragement and some guidance, it’s possible to get your kids interested in (and even excited about) saving their money, instead. Here are five tips to get you started.
#1 – Help Them Create Four “Piggy Banks”
Most kids have a piggy bank or jar that they use to collect the money they receive over time, whether that means coins they find on the ground or the birthday money they got from Grandma. Instead of one bank, create four, and label them “Save”, “Spend”, “Invest”, and “Give”. Encourage your child to put at least 50% of the money he or she receives in the “Save” bank and divide the rest as he or she sees fit. This way, your child will be proud of his or her accomplishments and more inclined to not only save, but to invest wisely and donate to charity in the future.
#2 – Help Them Set Goals
Is there something expensive that your child really, really wants? If so, use this as the perfect opportunity to get your child interested in saving his or her money. For example, if your child really wants a gaming console that costs $400, sit down and do the math to determine how long he or she will need to save in order to make the purchase. Tell your child that if he or she can earn just $10 a week, that’s the same as $40 a month. If your child saves that $10 a week every single week, he or she can have the console in ten months.
#3 – Set Up an Allowance System
If your child doesn’t receive money on a regular basis, then he or she doesn’t have much of an opportunity to save. Be sure that you take the time to set up some sort of allowance system that works for your budget and is age-appropriate. What’s more, don’t just hand out allowances on payday; have your child earn the allowance and keep track of the tasks he or she has done throughout the week so you can pay accordingly.
#4 – Set Up a Savings Account
You can set up a savings account for a child of any age, but children age eight and older will get the most benefit. Take your child with you to the bank along with his or her saved money, and set up the account together. Your child will love seeing his or her name on the account, and having “official” deposit slips for a real account gives children a sense of empowerment. In fact, you might find that your son or daughter wants to rush to the bank to make a deposit with every dollar he or she earns.
#5 – Offer Rewards for Meeting Savings Goals
Although you might think this sounds like bribery, think again. Doesn’t your bank reward you for keeping a certain balance in your savings account by paying you an annual interest rate? Why not do the same for your child? As an example, you could tell your child that you will give him or her $1 for every $20 saved. It’s not much, but it’s free money – and it’s a great way to get kids to stick to their guns.
Kids who learn how to save money at an early age are more financially responsible when they become adults. As such, implementing these tips is a great way to make sure that your child learns money management techniques that he or she can utilize for a lifetime.Continue reading