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Parenting & Us Kidz & Money | Kids & Money |
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Kids & Money Financial budgeting and planning is a skill that can be learned and practiced throughout our lives. Preparing our kids for life also includes teaching them to plan, to save and to spend wisely.
Rose, a mum of three children aged 14, 11 and 8, helps her kids to learn about money: out of the pocket money she gives her children weekly, $5, $3 and $2 to each of them, she suggests the budget should be: 50% for themselves, 30% for savings and 20% for charity.
Money management is not only about planning, saving and what to spend on and when to spend, it is also about self-discipline, self-control against impulsive spending and about common sense.
The following has been given by our viewers from their own personal experiences:
1 Talk to your child about how to save or spend when you give him or her the pocket money, what are reasonable percentages or amounts of spending and saving, and on what, eg. set a goal like Rose does:
· Making sure that proper lunch and recess is a necessity and the money must be allowed ;
· Introducing the saving and budgeting lessons slowly, perhaps one at the time, to allow your child the chance to practise;
· Give him or her the opportunity to make mistakes, don’t expect too much too soon.
2 When you give your child the money, make him or her feel that the money belongs to them, to build up some sense of responsibility. On the other hand, if you ask for the change, it would tell them that it’s other’s money.
3 When your child is old enough, provide the pocket money on a weekly basis, instead of on a daily basis – it tends to be easier to spend smaller amounts than a larger one; it also make more planning/ budgeting sense.
4 Reward your child periodically for achieving his or her saving goals. For example, offer him or her an additional amount of $2 or $5 after a school term, if he or she has reached the saving goal.
5 Make a Wish List with your child: list things he or she wants at the moment and re-visit the List later. Discuss the difference between “want” and “need”. This is a way of “cooling off” to delay instant gratification and to avoid impulse buying. It may also to teach a child what should be prioritised and what is more important in making of a plan.
6 Discuss what is a “good buy” and teach them the value of money. Using those endless bargain deals and sales offered by the shops as examples, you can point out that in a 40% off sale deal, you get 40% more value for your money.
7 Teach your child about advertising and consumerism: explain that the goal of advertising is to make us spend more money and how over-spending can hurt us.
8 Teach your child about the danger of debt and over-spending, such as loans, mortgages and credit cards. The example used have to be age appropriate, a 7 years old would not understand how a credit card works.
9 Set a good example for your child: when you are making a purchase, explain to your child why you need to buy it, how you have saved up for it and why it is a good chance to buy it now.
10 Introducing the concept of investing: show you child that money saved can make more money for the future – how short term goal can be translated into long term goals.
It is great for kids to learn to save, it is also important for them to learn when to take the money out. Give them a few dollars, let them learn some financial common sense. Hopefully one day they will grow into money-smart adults.
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