Parents wish to empower their children, so that the latter can take life head-on when the time comes. Providing them with the knowledge and the skills to deal with challenging situations responsibly is a crucial part of any upbringing process. Most schools and activity groups do not teach your child important management skills, as their interest in your child can never match up to yours. Learning the importance of money and having the ability to manage it, are skills that are acquired at a very young age. Teaching your child how to value money and to manage within the means, can help your child in a lot of ways in the years to come.
Money Management Tips for Kids
Today, the teen years begin at 10, making it the new 13. Over exposure to the fast changing world has changed demands of the kids as well. With expensive demands as such as gadgets and other fancy items, making them earn it is an excellent way of making them value money. Giving your child a fixed allowance every month and paying them incentives for doing a few household chores, will help them understand that resources are always limited. Teach them to save up this money buy what they want. If the item is very expensive, then you chip in half the amount or so, if your child is able to save half for a certain period of time.
Buying stationary is the biggest expense that kids have all through their academic year. Sit down with your child and make a budget for the things that he / she wants for the month. Books, games and other miscellaneous items, that are usually on your child's shopping list should be managed within a budget. Making such budgets will teach your child how to prioritize demands as well. Allocation of resources and comprehension of your own financial situation is brought out through the activity of making budgets. It is also a way of learning to let go of some demands, to satisfy a few others which are more important.
Maintaining an expense checkbook is one of the most important money management skills for kids. It is extremely important that you teach your child how to maintain an account for the money, besides how to spend it. A record of expenses will give you child a guideline as to where and how the money is being spent. Knowing how much you have and how much is spent, helps you value the limited amount of money better. Of course, there will be times when your child will overspend and ask you for a little more money. Do not be too hard on your child. Allow a credit limit that your child will be able to pay back through his or her allowance.
These are not saving plans for college or the next academic year, but say for an activity in the summer vacation. Budgeting will show your child how much part of the allowance is supposed to be spent, and how of it is supposed to be saved. You can make a few additions to this amount by giving your child monetary rewards if he / she performs well at school or helps out at home.
In a nutshell, money management skills for kids is about making the right choices, in order to reconcile the demands with limited resources. Besides money management, these tips will help your child to be more independent, understand the importance of prioritizing, self-control, and being practical. Starting early will give you an edge over other parents, as younger minds are easier to mold.