It is quite evident that most children and teenagers lack adequate budgeting skills to manage money responsibly. This however should not be so. Learning from the financial crisis, we all need to be smarter when dealing with money.
Many schools today have incorporated financial literacy into their curriculums. The sad thing is that some still have not. Regardless if schools teach kids about managing their finances, the responsibility of preparing a young one for the adult financial life entirely lies on the parents. However, the silver lining on this issue is that there are numerous ways this can be done, outlined below are a few of these methods:
Putting them on a Budget
- Most parents are quite aware of what an allowance is and how it works. In addition to this, you should also consider giving your kids a monthly cash infusion.
- Instead of dishing out a few dollars when they go out, teach them how to control their spending through limiting the money they receive to a specific amount every month.
- When enforcing this, be ready to reject your kids’ plea for money. This is because they usually spend all their allowance during the first week. For them to learn, you need to become a little hard on them.
Pay them when they choose to Save
- You should train your children to pay themselves by putting about 10% of any amount they have earned into a savings account. As a parent or guardian, you may go a step further by offering to match your child’s savings account. This will act as an incentive for him to save more.
- By allowing them to do their own research on the account that offers the highest interest rate and lowest fees, they will be able to not only learn about savings but also how the banking system works.
Give them some Clothing Allowance
- Instead of always giving your child money for every t-shirt, have him/her write down a comprehensive list of wants for each season. Think of a practical budget that you will deposit the cash on your child’s prepaid debit card.
- Doing this will give your kid the power to choose on whether to blow the whole budget on expensive sneakers or carefully spending it to accommodate for the various apparels that he might want.
Provide them with Budgeting Projects
- Be in the habit of asking your teen to research on the various budgeting projects you might have such as planning a vacation or planning to buy a new cell phone. Teenagers are usually very good at wading through various options available since they have a lot of time on their hands. Apart from the knowledge they will gain while doing the research, they will also appreciate the prices of different items and spending of what is available
Encourage your Child to Look for a Job
- Nothing can teach a person the value of a dollar better than a worked for pay-cheque that has undergone taxation. Encourage you kid to a get an after-school job to earn him some extra cash.
- If you are a guardian or a foster parent, the CSA contact agrees with this ideology. They further encourage and promote it as long as the child is not forced, their education is not interfered with and they are not given difficult tasks that are not meant for children.