How to Teach Your Kids to Organize Personal Finances
In order to organize the budget and invest in a dream common to the whole family, such as getting into a new car or taking a vacation, the participation of the children is essential. The first step in motivating children to participate is to teach them the importance of saving. Even simple practices, like cutting ice cream after school and giving an allowance, make a difference and help little ones understand the importance of financial education.
Here’s how to teach your kids how to organize personal finances:
Establish an allowance
Depending on the age of the children, an important step in teaching them how to manage money is giving a symbolic allowance. It is important to explain that the money should not be spent all at once because, if it runs out, the child will have to wait until the next month to buy anything else.
Show that nothing is achieved without effort
Explain the difference between tasks that are the child’s obligation, such as making the bed and storing toys, and those that are extra activities, such as helping to store groceries and ironing the furniture. Every time the little ones do an extra task they can be rewarded for it. This practice will make it clear to them that it is worth making the effort, since they will receive it.
Reinforce the importance of saving
Teaching children to save early helps to create healthy financial habits. Talk to the children and together create a savings target for the month and define how the money will be used. Start with small values and gradually increase as the child gets used to the practice. One way to stimulate savings is by combining that for every R $ 100 saved you will complete with another R $ 50, for example.
Teach how to avoid superfluous spending
Superfluous spending can compromise the budget. Therefore, the sooner children understand how they can avoid this type of expense, the better. A good way to introduce the subject is to say that the school lunch, for example, does not have to be bought in the canteen. When the little one takes food from home, in addition to eating better, he saves the amount he would spend in the canteen and can use the money for other things more important to him, like a movie theater on the weekend.
Set an example
There is no point in educating children financially if their own parents do not set an example. Show your kids how you keep spending under control and avoid impulse purchases in front of them. Teaching children the importance of personal finance is essential practice to ensure that they will grow up knowing the importance of money and that they should never spend more than they earn. The sooner the little ones understand that it is essential to consume consciously and value what they have, the better they will do in managing their own finances in the future.