Every child needs some knowledge of personal finance because you need to keep track of his expenses and help him to make some adjustments. We tend to put our hearts and mind into our children, as the saying goes, but that is not the right way. Parents should put some effort to make some homework as well. Of course, they won’t be able to teach about the most important things relating to personal finance, and that is how to make decisions regarding money.
Simple steps to protect your children
You must protect the impact of all the decisions your children are about to make and the consequences of those decisions. Personal finance is about managing your money. Managing it in such a way that your money is not controlled by others. These days where the economy is on a downswing and finances are tight, it is a good idea to encourage your children to manage their money wisely.
We might not need an economic calendar in our homes. However, we should have an economic calendar in our heads. This would include when you do things, and you can see how far things will go. You can teach your children the lessons associated with money. They learn to make some choices and keep their costs within limits when they go to buy something they need to research the costs and see exactly what they will be paying in terms of their immediate needs and terms of the costs of the item after their interest has added up.
If you are a very thrifty parent you may not want your children opening their pocket until they know that they have reached a certain age or have paid off a certain bill. The best way to handle your budget is to set allowances of some kind and have them manage their own pocket money. As they learn from you, their skills will transfer to their own pocket money. After you have set your allowances, give them some freedom, and have your necessities and wants to be set in a certain budget so that your children will learn from this. Pay your bills on time. People don’t always think about this, but if you have some debt, you are allowing your children to learn how to budget their money in a good way.
Calculate the expenses
You can also give your children an allowance and have them calculate what they are going to spend the money on. These few dollars may go a long way when they are in the car going to school; when they are with friends or have some alone time. Not only can you teach them good spending habits, but you can also put that money to better use such as giving to a charitable cause. Helping a family out of a bad situation, or maybe even just having some extra cash for the rainy days.
Have your children earn money by getting jobs. They can make money sitting at home. What job they do, their age, the experience will dictate how good an employee they are. They can work in the yard or deliver pizza lines. These are jobs that can help your children learn about responsibility, and at the same time, you can get some money in the pocket. Securing a source of income will teach your children early on that they should be able to make money and can’t be left without it.
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