Teaching your kids how to budget is one of those things that requires a frank discussion about money.
For any youngster, it’s all about being in control of his or her own destiny, or at least feeling as if they’re in control – even if mum and dad are still their personal chef, cleaner and taxi driver.
Giving a child full control of their own budget is an important step on their path to self-sufficiency.
Goal setting
Budgeting provides lessons in the virtues of hard work and planning for the future.
Learning to set goals and putting in place the steps to achieve those goals is a vital skill, one crucial to happiness in every aspect of life.
Sense of worth
There is no better way for a person to learn about the true value of money than by spending his or her own money.
When there’s hard work and tight budgeting behind the purchase of a new pair of expensive sneakers, they are all the more precious than if they magically appeared with the swipe of mum or dad’s plastic.
And along with a greater appreciation of their possessions, your kids will also get a boost to their own self-worth, for being trusted to control their own finances.
Resisting temptation
By learning to budget, a teenager learns about setting personal barriers and resisting temptation.
Yes, that app that all their friends are playing is cool, and is only $10, but that’s $10 that they won’t have to spend on socialising come the weekend.
Allocating money to specific targets is a great lesson in avoiding unnecessary waste.
Set your kids on the road to better budgeting by:
Leading by example: Sit down and go through the family budget with your child, so they can see where the family funds are allocated. If they can see the true cost of running the household, it might just make them more appreciative of all your hard work.
Making money part of everyday life: Once they’ve got their head around the family budget, let them have a go at controlling it, or start small by allowing your child to plan for a family day out. Give them the money, and allow them to figure out how to spend it.
Making them earn their keep: Earning money feels even better than spending it, so encourage your child to get a part-time job. Once they know they have a regular income, they will be able to budget and save for big-ticket items.
Getting them to save and plan on-line. Get them to explore the different types of accounts that banks have and their benefits, so they can make the most of their savings.
