One of the most important aspects of parenting is teaching your child the importance of money, and more importantly, how money doesn’t actually grow on trees. Since our schools (even colleges for that matter) don’t really teach a lot about savings, the responsibility of inculcating finances lessons in the children falls solely on the parents. Do you save money? As parents, you need to set a good example when it comes to spending and saving money wisely. This is especially important if you are battling a staggering home loan, car loan or even a credit card debt yourself and you do not want your kids repeating the same mistakes that you did. To raise a money-savvy child, there are 7 valuable lessons you should be teaching your kid. Read the following tips to teach the much-needed money skills to your kiddos and thank us later. Start saving yourself It is never really too late to start practising what you preach. Simply put, if you want your young ones to understand the value of money and spend it only when necessary, you need to do the same yourself. This is extremely important because kids respond to your actions and not to your words. Teach them the concept of savings If you want to instill the importance of savings, the simplest way to do so is to keep 2 different jars, labelled ‘savings’ and ‘spendings’, respectively. So, whatever money your child gets on birthdays, for finishing chores or by the relatives visiting your house, teach your child to divide it equally between the two jars. Teach them how to stick to the budget When you hand over your child the pocket money for the month, teach them to manage it in a way that it lasts all month long. Resist the urge to provide them with extra money if they spend their allowance without calculating their budget for the rest of the days. Make them save for something they REALLY want Be it the latest game or the action figure they have been craving for days, you need to teach your child to save for something that they really want. When you do so, you are actually making them learn the art of waiting to buy some thing costly. This way they will learn how to resist the urge of impulse shopping later in life. Teach them to track their spendings Another important aspect of learning how to save money is to teach them how to keep a tab on their spendings in writing. Give them a finance notebook and ask them to note down their expenditures. Also, encourage them to save receipts and bills for crosschecking later. Help them realise the goal behind advertisements It is a common sight to see kids getting attracted to advertisements on the telly and yearning for the same. It is the parents’ responsibility to teach the child why advertisements are created just to sell the product and should not be something that one should crave for. While you are at it, you can also teach them about the sale tricks which are used to allure the consumers into buying more products. Teach them that money DOES NOT grow on trees One of the most important lessons that you can ever teach your child is how hard it is to earn money and how easy it is to spend it all in one go. You have to tell them that money does not appear just magically as it takes a lot of toiling and hard work. One practical way to teach your child is to give him/her money for doing some household chores or running errands like cleaning the dishes, watering the plants and grocery shopping etc.
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