Children can grasp good money management skills at early age, if it is taught in the right way. The sooner they learn the ropes of managing their money, the faster they will learn to use it wisely. The earliest age to do is between 7 and 10, because that is when they will start to learn basic money matters in school too.
The best way to start off is by allocating a small amount which your child will be allowed to use for a week. Along with it, assign odd jobs around the house which they can do without hurting themselves. Once the assigned job has been completed pay them their allowance. By doing so, the child will realize the value for his/her work and will also strive to earn more.
The second step is to show the child to spend his money frugally. The salary must be allocated to three categories - saving, charity and spending. Apportion the money as 40-10-50 or 50-10-40, whichever is suitable. Now the child learns the basics of: spending the money on favorite things, giving away a part of it to charity and finally, to save a portion of it for themselves. These simple lessons when learned the hard way, will stay with them forever.
Visualizing a savings jar getting filled up will show how they reap benefits from their hard work; similar to, how they feel when they see sprouts from the seeds they've sown with their tiny hands. Give the child a transparent box or jar where they can put in their savings amount every week.
Teach children to give away charity money to church or some old-age or children home. This will show they how blessed they are and instill values like humbleness and simple living in them.
Simple lessons on savings will teach them to be more responsible with their money and prevent them from falling into debt traps in the future. Now that the teachings are finally over, let them enjoy their hard earned money.
More Information:
As a parent, opt for
budget planning software offered by
personal budget planning sites which you could demonstrate to the child as he grows bigger. This way, you become an ideal parent for your child, giving him financial security at all times.
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