In today’s fluctuating economy, educating your children about the value of money is one of the most important lessons you can teach them. As more people are running into financial difficulties, we should be ensuring that the next generation doesn’t make the same mistakes. Here is a look at some of the best ways to teach your children to spend wisely.
Talk to Them
Many children today, regardless of their family’s financial status, don’t know how hard it is to go without money or how difficult it is to make it. The best way you can overcome this is to talk with them about your own experiences growing up, when you saved for the things you wanted to buy and the cupboards weren’t always filled with food.
For most young children, where money comes from is not important to them. They can’t yet understand the correlation between working hard at a job to earn a wage that you can then spend on the things you need.
Remember this and tailor your advice to their age. Start teaching them in a fun way about money when they’re young by playing games or pretending to be in a shop. Then as they become older they can start to help around the house for some extra pocket money and, eventually, get a part-time job. This experience of looking after themselves and surviving will stand them in good stead for the future
How to Budget
It shouldn’t all be about saving everything you earn. Money is for spending and a way of improving your life, but children need to understand the benefits of both spending and saving. You should encourage them to save some of their pocket money and this way they’ll be able to afford a more expensive item later. Help them to set an achievable goal that they can work towards. This will teach them to be more resourceful with their money and to think carefully about how they spend it.
However, you should allow them to make their own decisions, within reason, even if it’s something that they’ll forget about after five minutes. One way of helping them to avoid debt in the future, is for them to stand back and think if they really need something before they buy it. This should stop them making impulsive purchases that they’ll regret.
Lead by Example
Above all, the best way you can teach your children the real value of money is to set a good example yourself. Everyone knows how hard that can be when we’ve been so used to getting everything we want instantly. However, if you make sure that you live within your means, budget correctly and save for larger purchases without running up excessive debts, then your children will follow suit.
Financial management is an essential life skill. Even if your children leave home without being able to boil an egg, if they can understand how to budget on a fixed income you’ll have helped them to achieve something.
This guest post has been contributed for SO Switch.