Teaching your child how to budget is preparing them to be successful with money. Budgeting is a life skill that everyone has to learn at some point in their lives. It is not a skill that comes naturally; it must be taught. As a parent, you can help your children prepare for their future by encouraging them to stick to a budget.
Use the following helpful hints for teaching your child how to budget.
Practice what you preach. As with most things in life, your children will be looking to you for advice on how to spend their money. If you do not budget, chances are that your kids will never learn the skill. By putting a budget in place for your monthly income you are teaching your child how to budget. Ensure that you are being a good role model for budgeting. Sit down with your child and show him how your budget works. He will have a better idea of what you are talking about when you say the term “budget.”
Establish a place for them to keep their money safe. If you want your children to learn the practice of saving, consider opening a bank account for them. This will help them better understand the concept of saving, but still allow him access to his hard earned cash.
Once the money adds up, the bank may be the best option. It also makes them more familiar with how banks operate.
Find ways for them to make money. In order to have money to budget, your children will need to learn to work for their money. Allow them to rake leaves or wash your car to make a small amount of cash. This will instill in them that if you want something, you must work for it. Going throughout the neighborhood and asking people if they need help will also give them some extra money to work with.
Give them an allowance. Another way to make sure they have cash to budget is to give them a weekly allowance. This should not just be free money. Establish rules and require your children to follow them. If they do, give them a weekly allowance. You may also give money for things such as good grades and good behavior at school. All of these practices can be used when teaching your child how to budget.
Help them keep track of where their money goes. Once your child has money, keeping track of it will be crucial in teaching your child how to budget their money. Allow them to keep a notebook and to write down purchases regardless of how big or small they may be. This will allow them to know where every penny they have is going and be a great way to help them learn how to budget when they are older.
Make sure they have long and short term goals. Have your children make a list of the things they want now and in the future. Encourage them to work towards long term goals. This will help prevent the “have it now” attitude. There are things in life that one must work for. What a great skill to teach your children!
Don’t over control your children. Don’t over analyze where they choose to spend their own money. They must have at least some control over where the money they have been saving is spent. Making all the decisions for your children financially is not teaching your child how to budget properly. While you don’t want them to blow it all on candy, this may just be they way they learn how to properly budget.
Let them be involved in some of your transactions. Use your financial transactions as a tool for teaching your child how to budget. This will give them experience to help them fully understand money. Give them the opportunity to pay for things at the cash register. Counting money is also an important part of budgeting.
Use the advice above to help your children learn how to properly manage money.
By teaching your child how to budget with these skills, you will be giving them the keys to a secure financial future.
Marina Chernyak is SAHM and co-owner of Matryoshka Nesting Doll store.