Start In Childhood
Responsible spending habits should start in childhood. If we were all taught how to manage money as children then that good teaching should remain with us as we grow into adulthood.
As a parent we are responsible to our children to make sure they grow up to be productive members of society. One way to do that is to make sure they can manage their own money.
One way to do this is to assign chores to your children and if they complete the tasks you give them satisfactorily, in the time frame you have set then they earn an allowance.
Giving children an allowance for a job well done can be very beneficial for your children, in a number of ways.
For starters, it gives them a sense of accomplishment that they did do a good job and introduces them to the concept financial independence.
Just giving them an allowance does not mean your job as a parent is done, however. Now they must learn about responsible spending and the art of saving money for the things they want.
They may get some instruction on this in their school but the best way to ensure they learn this valuable skill is to teach them at home. Include them, if you want to, to the weekly or monthly bill paying. Let them see what you do to keep the roof over their heads and food on the table.
It might be a good idea to take them to the bank and open up a savings account and teach them how to save a little off of the top of each week’s «pay». If they are young enough when this is started tell them they will be able to save enough for whatever they want in the future.
It is never too early to start planning their financial future, or even their retirement, at a young age. The sooner the better as a matter of fact.
Learning to set goals in life is as important as learning to manage money. If there are goals set and they reach those goals they will see that anything is possible if they put their mind to it. Even if it is just the latest, greatest toy that comes down the pike.
Parents who do pay their children an allowance can even offer to match whatever funds they manage to save to make major purchases as they get older, like for their first car.
They are no hard and fast rules when it comes to giving children an allowance. You can set an amount to be paid for each individual chore completes or just give a lump sum stipend at the end of the week like you get from your employer.
The amount settled on can often depend on the age of the child. For example the older child may receive slightly more than their younger sibling. Of course, the older child may also have more responsibility as well.
Learning about saving and responsible spending is a something that we should all learn as children so we can take it with us into adulthood.