Your children are sponges for knowledge. Do them a favor by teaching them healthy ways to take on real life tasks they will inevitably run into. By openly teaching them how to properly budget, they’ll be ready to face the real world when they finally get there.
Before doing anything, understand the important concept that children will make mistakes. It’s a part of growing up. If they decide to blow their small savings on a new toy, don’t criticize them. Simply have them live with the fact that they can’t get anything else. This lets them learn that their choice wasn’t the wisest. Yelling and arguing will only bring about deep-seated issues that could results in poor spending habits.
Play Savings Games
Whether it’s at the grocery store or the clothes store, give your children a limited amount of money to spend. See who can buy the most with what they have. This teaches them the important skill of paying attention to prices. By learning to shop comparatively, they’ll begin to understand the importance of looking around before making any decisions.
Let Them Budget
Once they are older, give them a small part of the family budget to manage. This can be entertainment, vacations or even groceries. Just make sure it is one you can set a limit on. Given this limit, allow your children to come up with a plan for that month. Carrying over the savings games’ lessons, they should now know how to research the best-priced deals to get the most out of what they have.
Practice the Stock Market
So many children are never introduced to the stock market even though it is pivotal in their future financial stability. Find an online resource that lets them learn the basics of trading in a practice account. This way, they can study the market and take risks without losing anything. The best will be a simple, entry level program.
Use Budget Tools
When they are old enough, give them access to any one of the myriad of free budgeting programs available on the web today. While they may not be pulling in a full salary, the little they do make can be properly documented. This then gives them a lesson in planning for the future. If they buy something now, they can plug it in to the program to determine any ramifications.
We love the 52-week savings challenge.
Finances are a major part of adult life and survival. Give your children a head start by teaching them smart practices now.