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Lead by example to teach them. By being able to save and invest intelligently in the future your children will be able to save more money and get the most out of what they spend. In the following article we look into a few tips on what you can do to raise financially responsible children.
1. Teach them the Difference Between Need and Want
There’s a lot of marketing today that is aimed towards children, which is blurring the line between wants and needs. If you want your child to be financially responsible then you need to show him or her the difference between need and want. Only then will you be able to build a strong foundation for your child so that he or she doesn’t end up wasting money in the future. Your kids should be able to see through these marketing ploys that are aimed at them.
2. Give a Debit Card to Older Children
When your children are old enough, you can open a bank account for them and give them a debit card so that they learn to spend money wisely. This money can be spent by your kids for personal use but you should monitor their activity. If you choose to go this way then let them know how they can keep a track of their account’s balance by signing up for email/text alerts. This is a basic step but goes a long way in helping your children understand the importance of using money wisely and efficiently.
3. Go for a Chore Based Allowance
While this isn’t an idea that is practiced by all parents, you can think about doing it as it could help your child understand the relation between money and work. Here, what you do is instead of giving your child a weekly/monthly allowance, you give an allowance that is based on the chores they do. This shows them that there is a tie between work and the money they’re getting. Besides the regular chores, you can also give your kid additional chores that he or she can do to earn some extra money.
4. Create a Savings Plan
Every kid wants something expensive, whether it’s the latest Xbox or something else. So go ahead and allow your kid to choose an expensive item that they would like to buy, and help them to save money for it. In addition to helping them like or appreciate the item more (since they bought it with the saved money), the saving process also shows them how to budget the right way in order to buy things that they cannot afford outright.
Being a parent, it’s your responsibility to guide your children towards a better financial future. Take some action now if you want your child to understand the value of money and take the necessary steps to save in the future.