Life and Career Skills

We have learned an important lesson from recession, that we must have an effective money management plan. It is undeniable fact that there might be a fair chance of future turmoil in economy that might affect our children in future. Thus it is highly advisable to induce the value of money into our children and teach them to mange their finances on their own so that they be ready to face any kind of situation in future.

To make children understand the value of money you must plan out a strategy which is based on positive suggestions, instead of telling them what to do. It needs a lot of patience, and takes some time but at the end it certainly will make the best out of your kids.

Here are some tips for teaching children to manage their finances:

Allowance:

Set a weekly allowance plan for your kids, depending on your kids age, and stick to it. To learn about money they must have some in the first place. Do not give them more than required. There should be some strain on their finances so that they are forced to think about spending. In case they over-spend do not bail them out, it will just make them spend more. Let them figure out the way to get out of their financial problems.

Supervise:

Supervise your kids spendings, but do not force them about where and how should they spend their money, instead be suggestive. Talk and discuss with them and give them the information they need to make a good decision. Forcing the kids to obey you will just make them more rebellious and may divert them to do things like stealing , just to spite you.

In case they make a mistake, let them sort it out on their own. Do not bail them out or help them unless it is inevitable and every time something wrong happens you must let them know and understand the importance of accepting the consequences. Our job is to teach them to face problems and solve them.

Reward program:

Set goals for your children, for example let them know that if they save more than certain amount, they get bonus. Reward them for showing how they saved money by spending on the best deals. Discuss and set long term and short term goals which are within reach of your children and reward them when they achieve it.

Saving tricks:

Teach them saving tricks. Take them to the super market and show them how you choose any product, and that what do you consider to be the best deal. Allow them to purchase their needs from their own spending account, don't just buy things they point at. Let them understand what it costs, and how it affects their savings. Let them understand that some things must wait, till the accounts are balanced. You will be surprised how quickly “the game boy” will become unimportant and put it on a back burner till they are able to get their accounts balanced.

Later, when they are old enough you can help them open up their own bank accounts in a real bank, and learn to use their finances wisely on a larger scale. Before you know your kids will be ready to embark on their own journey ready with all the tricks of trade.