As far as finances are concerned it is important for any child to know how to handle money from an early age🇧🇷 After all, money is not just for adults. Thus, it is up to parents to instill in their children not only how important it is to save, but also how to spend money well. Ie, if we realize early on the importance of money and its value, we can more easily avoid financial problems in the future.Throughout life, we all learn, in whatever area. And with money it is the same. Thus, one of the first teachings we should share with our children is: “how should we spend the money?🇧🇷 In other words, children have to understand some basic rules for their financial education, namely: the value of money; what they can do with it; learning to make decisions; not always “you can have everything”; to have money it is I have to work; finally, money is not infinite. Imagine that your child spends his allowance the day after receiving it. In that case, you must sit down with him and explain to you the consequences that may have in the future if you do not know how to manage money that you have at your disposal. Tell him that this week he won’t have any more money to spend. Also read: How to “convince” your children to like personal finance?
15 tips to help your kids handle money
Surely, you’ve asked yourself:should i help my kids manage money🇧🇷 Yes, you should, but beware, they should make their own choices. Deep down, parents must help and advise, but children must learn to make their own decisions.
Disposable Income VS Savings
Your children must understand that it is only possible to spend if there is Yield🇧🇷 On the other hand, good financial management is only possible if there is some savings🇧🇷 Therefore, it should be instilled from an early age the importance of job to obtain income and thus be able to fulfill their dreams in the future.
Distinguish the essential from the superfluous
The child has to realize in the first years of life the difference between a necessity and a luxury🇧🇷 For example, explain to your child the difference between buying a carton of milk and a simple toy. Explain further that having a pair of shoes may be a necessity, but having many is a luxury. Finally, include your children in choices and decision-making at home. Only then will they know how to deal with money and understand the difference between what is really important to have and what matters little or nothing.
Know the prices
To realize the value of money you need to know the prices of things🇧🇷 Thus, it is necessary to give them time and examples so that they understand how much each item costs. When asked to buy something you should explain to your children what this entails.A good way for children to learn the value of money is when they ask to buy something, their parents suggest going to the “piggy bank🇧🇷 That way, they will begin to realize how much money they have to “lose” to buy what they want. Explain to them that everything has a cost and that the price depends on many factors, such as: transport, labor, its distribution, the raw materials used, among other things.
Knowing how to handle money: the difference between “spending” and “investing”
As children grow up, and when they already know what saving is, they should move on to the next stage. In that regard, should explain to them that in addition to being important not to spend everything they have, they should also learn to multiply their money🇧🇷 In other words, they must invest. But how to teach this? You can start by offering them a book on this subject, play games that teach how to make money grow (monopoly, for example) or even show them some investment options. But always use a simple language.
Assign a fixed allowance
If you decide to give your children an allowance, then opt for one fixed value🇧🇷 Check how much you can give them, but always take into account their age and needs. Therefore, you must evaluate the expenses you have and what makes sense to give them for a correct management of your money. On the other hand, you should only increase this value if it is really justified🇧🇷 After all, when you work and if the money doesn’t reach you by the end of the month, your boss won’t increase your salary. The same applies to your child. He has to learn to live with what he hasRead more: Allowance or allowance: when and how to give it to my children?
Set savings goals
One way to encourage children to save is to set goals always according to your age. For example, if your child is 8 years old, you can encourage them to save money to buy a toy. But if he is 16 years old, it already makes more sense to save for a vacation or save money to go to university. The options are many, what matters is having a goal for the child or teenager to understand why they should save.Also read: Entrance to university? Teach your children to manage money;
Only give money for essentials
For your child to understand where to spend the money, it is important that you only give him the amount necessary to ensure the essential expensessuch as: food; school transport; school supplies; and other needs that are justified.
Knowing how to handle money is knowing how to save a part
Another very important aspect is don’t spend everything you get🇧🇷 So, you should instill in your child the habit of always saving a portion of the money. The ways are several and all valid as long as he really doesn’t spend the whole “allowance”. For example, you can make a piggy bank or open a bank account🇧🇷 Explain how you can create a financial reserve for something important in the future if you don’t spend all the money.
Avoid purchases without criteria
Another thing you should teach your children early on is that they shouldn’t “buy for buy🇧🇷 That is, nowadays the incentive to consume is great and the temptations are many. In this sense, you must educate them to be patient, to think before having the “impulse” to spend the money. Is it really needed? Is money needed for something more essential? This applies to all of us, but even more so when we are children or teenagers!
Not having a lot of money in your wallet
With the growing use of digital money, we use less and less money in our wallets (the famous bills and coins). However, when we use bank cards too much, we sometimes lose track of what we spend and where we spend the money. So, for your children to learn to control the money they have, the ideal is to use only physical money (at least in the early days and a low amount)🇧🇷
Knowing how to handle money: look for the best solutions
Another way to help your children handle money is to get them used to find the best solutions at the lowest possible price. If we can buy pants for €30, why are we going to pay €40? If we can have the same telecommunications service for 50€ why should we pay 60€? This must be the reasoning! For this it is important learn to search and compare prices🇧🇷 If possible, consider the option of “share🇧🇷
Sell ​​what you don’t need
Who doesn’t have something they no longer use at home? Probably everyone! Teach your children to sell what you don’t need🇧🇷 For example: clothes; games; toys; books; etc. That way, they always earn some extra change to buy something they like or for their savings! Furthermore, it contributes todestroy” your house.
give to those in need
Knowing how to deal with money is also simply learning to “to give who really needs“. If you like to help and you don’t even have money problems, you can always tell your child to give it. It could be to a friend who is more in need, to the church or to any association that helps the needy. you may not need it, but there are always those who need it!
Knowing how to handle money: borrow or transform instead of buying
Have you thought about borrow instead of buy🇧🇷 There are things you can ask someone instead of spending money unnecessarily. For example, a book or a CD/DVD. Or, you can use existing parts for some purpose, instead of “buy new”. For example, pants that you have and don’t wear for some reason can be used to make shorts. you can find everything on the internet, from books, music, movies, among other things. But always use legal platforms, of course! Instead of buying a CD/DVD go to youtube, for example. In this way, instill in your child that not everything in life has to be bought! Sometimes, you just need to be imaginative and go the other way, which is cheaper by the way… in the end, it teaches them and prevents them from spending their lives asking them for things. Who hasn’t seen the famous phrase, whether in the supermarket or in a store, “dad, I want this”, “mom, I want that”. Money costs everyone! And your children should learn this from an early age…
Promote your child’s skills
We all have our talents! Why not take advantage of them? Depending on age, there are always skills that can be put into practice to earn money🇧🇷 So there are a number of things your child can do, even if it’s on vacation. For example, if your child likes children, why not help take care of others? Or if he likes animals, why not walk pets? And if he likes crafts, why not make some pieces and sell them? Or garden? DIY? When you have taste in something, you have to enjoy it🇧🇷
A professional writer by day, a tech-nerd by night, with a love for all things money.