How to teach your children about Money Management

As parents, we do all we can to ensure a good future and the best possible opportunities for our children.  One of the most important skills we can teach our children is that of money management.

Here are a few tips on shaping your children’s financial behaviour and attitude towards money.

  1. Steady income
    Teach your children the importance of a steady income.  They need to earn the allowance and understand the concept of working for an income. Ensure their weekly or monthly allowance is given on the same day and the amount remains unchanged (just like your salary).
    If it is possible between their school and outdoor activities, encourage them to supplement their income with doing additional small jobs for your family, friends and even neighbours.

  2. Setting of a budget and financial goals
    Explain the importance of setting a budget and financial goals.  Their allowance should be a reasonable amount for their age, and they should be responsible for some of their own essential expenses.  This will teach them to control their income, is not only to have fun with friends and buy cool stuff but also to pay for essentials.

  3. Get them their own bank account
    By getting them their own bank account, they can understand the responsibility of money and the access to it.  They can learn how to use an ATM and online banking.  How to make deposits and withdrawals, the costs thereof and the necessary security around it as well.

  4. Encourage saving
    Saving is the most important element of money management.  Teach your children to save a % of their income monthly. They need to learn that saving is required to achieve major purchases later and can provide less financial worries in the future.

  5. Spending wisely
    An excellent way to help your children learn about saving is when you shop with them. Help them to look out for best value items, lower prices and specials.  Teach them about loyalty rewards and coupons.
    Help them to get a new perspective on spending, for example; they can limit the amount, sizes and even choices of snacks with their movies to save more for their new rugby ball.

If you’ve fallen victim to poor money management and find yourself in unmanageable debt, please give Debt Rescue a call.

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