Probably, your above-average kid knows how to plunk out a Mozart concerto and ace his Mathematics test, but does he know how to craft a frugal budget and stick to it? Does he know the exact way to manage his multiple credit cards and pay an electricity bill?
Being a good student, respecting elders and being terrific in academics and sports is not all that your student needs to be good at. As times get harder, he needs to be financially responsible as he’ll need all the financial skills when he grows up to be an adult. Thus, as a parent, it is your responsibility to raise money-smart kids who can take care of their own future without having to rush to professional companies for help.
It’s time to face the bare truth of life! Once your kid grows up and enters adulthood, those delicately polished piano or violin skills will hold slightly less importance than his capability to handle his own financial life. According to an opinion of a kids and money management expert, they fall as parents when they can’t equip their kids with the ability to manage money as them. If you’re interested in arming your kids with the minimum financial sense so that they don’t need to learn things the hard way, give them time and make them go through some money experiences.
Personal finance tips that will help you raise money-smart kids
Have you ever had the experience of living paycheck to paycheck? Have you ever wondered about availability of funds when you have to repay your bills? Would you love it if your kids too have to learn the hard way? Bet you won’t! Educate yourself on some financial experiences that you must make your kid go through so that he may grow up to be a financially responsible citizen.
Ask for his contribution while you make the family budget
Research reveals that most kids don’t have any clue about where the money of their family goes and this is the reason why they don’t hesitate wheedling for any expensive item that strikes their fancy. Conduct a meeting once in a month and invite your kid too so that he gets to know the intricacies of crafting a frugal budget. They should learn the techniques for tracking and devising a spending plan. Elucidate the difference between needs and wants repeatedly so that this can rewire their urge to buy everything.
Let him accompany you to the grocery stores
You can take your kids to the grocery stores and give them a spending limit of about $20 and ask them to give you ideas of getting the things that you actually need within the set limit. This will incorporate the habit of staying within ones means. Apart from assembling the ingredients of pizza and drinks, a kid also has to give a glance at the budgeting portion of your family so that he can help them reach their long-term savings goal.
Make them pay the bills on time
You must not be aware of the fact that educating your above-average kid on the mechanics of bill payment can trip them up. Show the teens and the tweens how you make the monthly payments for your electricity, telephone and make them read through the bills. Ask them to write the check that you used to write so that they may get a first-hand experience of the exact way in which payments are sent to the electricity company.
Put to place a savings goal
Even kids as young as 5 or 6 years old usually imagine where they’ll be 10 years later and what may be on their list of must-haves. A car or a computer or a college education? Try to find out the thing that they want the most so that when you dedicate a portion of their piggy bank towards savings, they’ll exactly know where they’re funneling their money.
Last, but not the least, you should teach them the exact way of handling their credit cards and the significance of debt in their lives. Make them familiar with the present financial big picture of the country so that they know what they may be subject to if they play around with money and plastics. Overspending, leading a life above your means and wavering away from the budget should definitely be discussed and of course, discouraged.