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Teaching Children About Money

May 13, 2011 by Leave a Comment

Every parent wants to have the best for their child. The best of the clothes, the best of the schools, the most expensive and trendy toys and so on. You can find parents who spend a bulk of their salary on their child to make them happy. They may even go as far as changing their whole lifestyle to suit the whims and fancies of the child.

All these are great gestures, but take a pause and think of the consequences these would lead to. When you give into each and every desire of your child you are showing them that they can have anything they want, they simply have to ask. Eventually you would spoil them and they won’t have any regard to how they get what, they simply demand for it.

It is important to teach your child the importance of money from a very young age. You would feel like showering them with gifts and toys, but it would only convey the wrong message to them. Make them earn what they want, but make it seem like a reward for something good they have done. For example, once she has saved enough money from doing chores, take your daughter shopping for some really nice pretty dresses for her summer wardrobe . Also, take your son to buy that new video game he wanted that he earned from a summer job.

You can give your child the things he wants in the form of prizes. This way he would learn to respect the meaning of earning. It builds their character and makes them dedicated to their work. Or you may give them pocket money which would make them responsible for what they want and buy, and let them know the value of saving as well. Through these small gestures your child would learn the importance of money.

Filed Under: Budget, Parenting Tagged With: ,

Keeping an Effective Family Budget

May 2, 2011 by Leave a Comment

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When you are the head of the family, you are expected to keep finances in control. This is simply the way of things. Maintaining a working family budget really is not easy, but it can be such a lifesaver when all of your finances are managed properly, your bills are paid and you always have the money that you need, when you need it.

Keeping an Effective Family Budget

  1. Determine how much income you have coming in on  a regular basis through all income sources.
  2. Determine how much money you have going out on a monthly basis due to fixed bills, things like your house payment, your utility bills, cable, internet, phone, car payments, credit card or loan payments and so on.
  3. Craft a budget that matches income in with income out. Make sure to account for savings, so that you will be able to handle surprise expenses as they come up rather than putting yourself into debt in the process.
  4. Look at successful budget ideas such as the 60% principle, and see if you can apply these principles to your own budgeting needs. These types of budgets exist to help you account for everything, including bills, savings, fun money and so on.

This is just a jumping off point when it comes to your family budget. Keep in mind that your budget should grow and change as your family does, and you should appraise it every year and make sure that it is still benefiting your family, or change it as needed to make sure that it continues benefiting your family.

Filed Under: Budget Tagged With: , ,

Money Management for Children

February 8, 2011 by Leave a Comment

One of the best ways to teach your children to respect money is by setting them up with ways to earn it themselves. Money that is earned is much more likely to be respected by children than money that is just handed to them.

Many professionals recommend not tying an allowance to chores that have to be done, this is very reasonable. However, this doesn’t mean there is no way for your children to earn money. They can earn money by doing extra chores around the house. Do you have some dusting, or window washing to be done?  If so, this is a great job to pay your children to do.

If your children are older they may be able to do yard work or babysitting for neighbors or friends, this can be the ticket to them having enough money to be able to really do something with it. When they have more money they can begin making charitable contributions or saving for something big. If you do your job right they will want to do these things on their own, but you should make sure and encourage them to do this even if it doesn’t sound fun to them.

Being responsible with money will not happen overnight, but it will only happen when children are given the chance to do it, and the chance to fail at it.

You may wonder what a good age to begin these lessons is, and there is no hard and fast age. Some children may be ready as young as six or seven, while others will still struggle into their teens. However, if you provide a good example to your children they will likely follow suit. Take the chances that present themselves every day to teach lessons about money and money management. When you are using a credit card, explain to them what it is and how it works. If you are writing a check, do the same. They will then be able to connect these forms of payment with the “real money” behind them.

Filed Under: Budget, Child Development Tagged With: , ,