One of the most important life lessons you can teach your child is how to handle money. It is a skill that they will take with them right through to adulthood and one that they will greatly benefit from.
It will eventually become a habit over time and is surprisingly easy to teach.
Give them an allowance
Avoid handing out money whenever your child asks for it. Instead, give them an allowance that you won’t top up if they run out. This will help them to learn about money managing, saving and budgeting.
Set up a savings account
Set up their own savings account that they can’t access until they are 18 and encourage them to put in at least 10% of their monthly allowance. If they are only putting a small amount in each month, it will take a while to show any significant savings but make them keep at it. Eventually, they will see just how much it builds up over time. The more you have saved, the easier saving becomes.
Pay them for chores
Give them the opportunity to raise money for special things like concert tickets by paying them to do chores. This way they will learn that hard work pays really does pay off.
Help them to budget
If they want to get new runners or a phone, rather than just telling them they need to budget their monthly allowance, you need to show them. Set up a spreadsheet with their incomings and outgoings so that they can track where most of their money goes and what they can cut back on to save for whatever it is they want.
Set a good example
Kids are more likely to learn by what you do rather than what you say, so show them how to be good with money. Avoid buying new clothes unless you have a valid excuse, put a savings jar in the kitchen and let them see you build it up, avoid going overboard with an overdraft and admit when you have spent unwisely.
It is going to be tough to start off with especially if your tween is used to having money handed to them whenever they wanted, but it will benefit them in the long run.
