The ABCs of Budgeting: Teaching Kids the Value of Money Management
The beginning of teaching children the value of money management, budgeting, saving, and general financial literacy is a must and you have to start from an early age. This process doesn’t have to be difficult, you just have to come up with ways to keep them interested and motivated and make learning about money a kind of fun.
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What Does A B C Mean?
These letters represent the three most important words perhaps for the financial world and children, namely: assessment, budget, and control. Although they are completely different, they represent a tripod of knowledge and perfect formulas for your children. When children receive money, they count it and assess which expenses they will spend money on and which they will not. Then they establish a budget for a certain period, and then they have control over their money. It is very important to teach children to control themselves and resist the urge to spend money on nonsense. Therefore, it is very important here that you teach them how to manage money for savings, budgeting, and anticipated expenses, all of which can be entered in activity tables on credit cards for children.
The Origin of Money
Before you start anything, you will have to teach your children about the origin of money and how it is earned. There is only one correct way to earn money, and that is through hard work. Money is one of the main secondary things in the world and learning how to handle it is a matter of discipline and education, and money must be treated with respect.
An Important Difference Between Needs and Wants
Needs include the basic and mandatory expenses that every family has from rent, bills, purchasing groceries, clothes, shoes, kindergartens, courses, and all additional expenses that arise during the month that must be paid. Only then, if the parents have some money left, they can spend it to fulfill their children’s wishes. In this way, children will understand that money must be budgeted and distributed for a family to have a normal life.
Provide Them with Their Own Children’s Credit Card
One of the most effective, easiest, and best ways to teach children all aspects of financial literacy is through a credit card intended for children. Each company has its mob app that can be installed on any device and will have everything in place.
What this card offers is the possibility for children to draw up their own savings plan, earn, buy, invest money in various types of stocks, and donate money to the needy, all with the option of filling out activity tables. Activity tables are designed to make life easier for children and parents, where there are personalized tables for household chores and curricular and extracurricular activities. These children, fulfilling the given obligations within the stipulated period, receive additional money, so they can earn extra money and increase their allowance.
Be An Example
You must be the best example because children absorb everything like a sponge, and will imitate you in everything you do. Therefore, you also have to behave responsibly and discipline towards the disposal of finances. It is desirable to include them in the purchase of groceries, to show them how much monthly expenses the family has, how much money is saved, and the like.
Encourage Them to Earn Extra Money
This is usually true for teenagers because the money their parents give them is not enough to cover all their expenses. Therefore, many teenagers start doing some kind of part-time job so that they can have more income. There are many jobs that teenagers can do, from babysitting, dog walking, tutoring, gardening, mowing the lawn, looking after pets when the owners are on vacation, and working in a cafe or shop. There are various possibilities, it’s up to you to encourage them and let them decide for themselves what they want to do.
Teach Them to be Patient
Children of all ages must be taught to be patient and to know how to spread the money over several days. If the children do not distribute the allocated money rationally and soon run out of money, they should not be given new money. Children must know how to take responsibility for their actions. We recommend that you give them a budget at first once a week and then monthly. Sometimes they should wait to buy something, and not be impulsive when it comes to spending money. They must plan expenses as well as anticipate some expenses that may occur during the month.
