Parents should be in position to teach their children how to budget. In life you will not find any common schools that teach you how to budget, save and deal with other personal financial matters. As a parent there are some activities that you can use to teach your children how to budget, and save among other financial practices.
Parents can teach children about life and how to conduct themselves in society. Children are abound to pick up mannerism, values, beliefs and so much more from their immediate family members.
That is why parents are the best people to teach children all about money and budgeting. It is vital that you teach your children how to budget at an early age and show them the importance of saving and be accountable
Start with the allowances
Most parents give their children an allowance based on age, after doing chores at home or any other reason. If your children are already receiving an allowance, then this is a perfect point to start teaching your children how to budget, save and spend their money.
If you give your children an allowance of about $10 every two weeks depending on what your financial ability, then you will need to buy the child a few piggy banks where they will be keeping their money.
Label the piggy banks with the child’s name, savings and church if you are a Christian family who practice tithing. Teaching your child how to tithe at an early age is a good value. When the child receives the allowance encourage the child to take off 10% off their allowance and put it in the piggy bank labelled Church.
Teach the child about the principle of ” pay yourself first”. The child should put aside about 40% of their allowance in the piggy bank labelled with their name. The child should be taught that this money can be used for important things such as vacations.
The child should then dedicate a certain amount of money towards their savings and the remainder or the allowance they can use on their daily expenses.
Involve your children in grocery shopping
Another excellent way to teach your children about budgeting is by involving them in the planning of the next grocery store list. Let the children know how much money will spent on groceries. Then, ask them to come up with a grocery list by looking at what is necessary for the family that should last at least a week.
The children should look in the refrigerator and pantry and see what items need to be bought. After the children have created the grocery list, go over the list with them just to make sure that they did not leave out any item
When you go to the grocery store, let the children to pick the items on the grocery list and have them keep track of the cost of each item on their calculator. This experience will overtime teach children the importance of planning on how to spend money and how to stick to your budget.
Teach the children how to save
Most children would want to have the latest games or toys but most of them have no idea how much such toys cost. Go with your child to the store, and have them look at the cost of the game or toy they want. Calculate with them how long it will take them to save enough money to buy it. This will teach you children how to save money especially if they want to buy a certain item that mom and dad will not buy for them.
Involve your children when preparing the family budget
Most parents will not involve their children when making a family budget. However, this is wrong because children are part of the family and it would be nice to let them know why there is a family budget and its importance.
This will mark the beginning of teaching children about financial planning. Go over the concepts of assets and liabilities and give your children a deeper understanding on what is priority and what is not.
Involving the children when creating your family budget will make them feel important, and at the same time will be teaching them the principles of budgeting, making savings and financial discipline. You will appreciate the beauty of teaching your children how to budget and save at an early age in future, when they are able to manage their finances well.