With our fourth child about to head off to university and three of them already moved out of home, I think we are doing OK when it comes to parenting and teaching children how to budget and live outside of the family home.
Don’t get me wrong, there have been times over the years where we have really struggled, and various family members have ended up in the situation of entering into a debt management plan, if this is something you are considering, check out dmp pros and cons
Hopefully if we continue to teach each of the children about being careful with money and budgeting, they will avoid having to make these kind of decisions, here are three top tips to teach children about money, maybe you’ll find them useful.
Top Tips To Teach Your Children About Money Management
Allow them to practise good money habits early on
Whether you have a soon-to-be college graduate who will be managing money, or a two-year-old who has just learned about what money is, there is always an opportunity to teach good money habits.
While you may have heard the research stating that it takes approximately 21 days to form a habit, this is a bit different when money is involved.
To ensure that your child avoids significant debt and financial hardship later in life, teach them about budgeting, saving, and giving.
These lessons are often most effective when learned first-hand, so be sure that they get to practise each by experience.
Provide chores that they can do around the home to earn money, and then explain how to best use the funds.
Encourage them to save for University
Currently, the average yearly cost of university fees in the UK is £9,535.
Rather than waiting until their early to mid-teen years to discuss the cost of going to uni, it is important to explain this to your children early on in life.
Let them know of the importance of saving for the high cost of education right away. Although some children may have a hard time seeing the value in saving for something that is many years away, it is essential to teach this lesson.
Not only will they have most or all of the funds needed for college once they reach that level of schooling, but they will have also gained the experience needed to save for long-term financial goals (such as retirement).
All four of the children had part-time jobs before heading off to uni to ensure they had enough money to live off whilst away, Eowyn at the age of 16 has already started a part-time job and learning the necessary skills for saving and budgeting.
Help children learn to be happy with what they have
If your child is always asking for the latest popular toy or activity, helping them learn about finances can curb these requests.
When you begin to teach money management to your children, they will be far more likely to appreciate what they already have.
Why? They will see the hard work and planning (budgeting) that has to happen in order to make purchases.
This is especially true if they are required to earn their money through chores to make fun purchases.
Although it may not seem like a top priority (especially if you have younger children), educating your kids about money is crucial for a lifetime of financial health.
By allowing them to practise good money habits from the beginning of their lives, encouraging them to save for college, and cultivating contentment with their current possessions, you are setting your children up for a happy and balanced adult life.
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