In these evolving times, wouldn’t it be great if children could be given hands-on experience at managing money independently? Here are a few tips for parents on making their child a smart money manager and a financially prudent citizen:
Provide an allowance
Parents usually have a set budget for their kids as pocket money. Giving allowances to children provides them the financial freedom to manage money, make affordable mistakes and practice the art of money management.
Every concrete plan begins with setting a goal. Children should be taught to set realistic goals for themselves. Parents should ask their children to plan their finances carefully with attainable objectives.
Help them with budgeting
Parents will definitely agree that one of the most basic aspects of managing money smartly is to create and maintain a budget. Parents should guide kids to set their monthly budget. If needed, help them categorise their expenses, put a cap on each category and monitor their spending across categories.
Teach children to think critically
Children are constantly being exposed to various advertisements and other marketing gimmicks. Hence, it becomes important to teach children to become conscious consumers. Children need to learn that sometimes products are not always what they seem, and they need to evaluate properly before making any purchase.
Make them saving savvy
Savings are of utmost importance for maintaining a healthy financial situation. Parents can encourage the habit of saving among their children by giving them a goal to save a certain percentage of their allowances by the end of every month. Reinforcement should be done by rewarding the successful attainment of goals.
(With inputs from Slonkit)