You want to make sure you teach your children how to value money and make sound financial decisions. However, you’re probably not quite sure how to do this and when to start. Whenever your daughter or son starts becoming curious about money is the right time to start teaching the basics.
Discuss wants versus needs
You can discuss certain financial concepts, like needs versus wants, and saving money from an early age. You can give a child a toy cash register, get help when clipping out coupons and show how you save money.
When your children go shopping with you, show them how you compare items to find lower prices. Explain how special brands like Nike and Adidas cost more than other regular shoes.
Involve them in the family budget
Some parents do not want to involve their children in their finances and will rarely discuss money with them. Children who are left completely in the dark will often battle to handle finances wisely when they’re older.
Your children do not have to know every detail of the family budget but a good place to start is to help them to understand the difference between necessities and luxuries.
When they understand what you need to pay out on a monthly basis as a family and what is left over for extras, it can be a good learning experience. Explain that electricity, water, heat and food are necessities whilst brand name clothing, Netflix and the latest cell phones are luxuries.
When it comes to a special item, such as a dress for homecoming, get your teenage daughter involved in finding dresses that are within budget and look amazing.
There are many funky short homecoming dresses available at reasonable prices that will make her feel like the belle of the ball. She will realize that she doesn’t need the most expensive dress to look good.
Give them a monthly allowance
Having to manage a monthly allowance can help older kids learn how to manage their own expenses. They learn how to spend the money they receive wisely so that it lasts through the month. They will probably make mistakes at first but they will hopefully learn from them.
The idea isn’t to spend more than normal - the allowance amount would include what you would buy for your child anyway, such as shoes and clothing, etc.). Of course, what you expect your child to buy with an allowance will depend on the age of the child.
Teenagers are usually excited to try and get the most value for their money when it comes to clothing. JJ’s House offers a range of clothing for every occasion at reasonable prices.
When children receive an allowance on a monthly basis, they can also see how money can accumulate and it teaches them to save up for what they really want. If they do want to buy a brand item, they know they may have to work extra shifts at a job to pay for it.
Practice what you preach
Just like eating healthily and exercising, your children are more likely to follow your example than listen to any lectures. If you want your children to grow up financially savvy, you need to model good financial behavior.
Enfranchise your children to make financial choices and understand how to budget. Reinforce a wants versus needs mentality and demonstrate the value of looking for bargains. Share your family budget with them so they can see why you make certain decisions. This gives them the opportunity to understand the value of money and start learning how to make smart financial decisions.