How can I help my children deal with money?

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With regard to finances, it is important that any child knows how to handle money from an early age . After all, money isn’t just for adults.

Thus, it is up to parents to instill in their children not only how important it is to save, but also how to spend money well. That is, if we realize from an early age the importance of money and its value, we can more easily avoid financial problems in the future.

How to instill in children the importance of knowing how to handle money?

Throughout life, we all learn, in whatever area. And with money it is the same. Thus, one of the first teachings we should share with our children is: “ how should we spend the money? In other words, children need to understand some basic rules for their financial education, namely:

  • the value of money;
  • what they can do with it;
  • learn to make decisions;
  • you don’t always “have it all”;
  • to have money you have to work;
  • Finally, money is not infinite.

Imagine that your child spends the allowance the day after receiving it. In that case, she should sit down with him and explain the consequences that she could have in the future if she doesn’t know how to manage the money she has at his disposal. Tell him that this week he won’t have any more money to spend.

Money talk with father

15 tips to help your kids handle money

You have certainly asked yourself: “ I should help my children to manage their money ”. Yes, you should, but beware, they should make their own choices. Deep down, parents should help and advise, but children should learn to make their own decisions.

Disposable Income VS Savings

Your children have to understand that it is only possible to spend if there is income . On the other hand, good financial management is only possible if there is some savings . Thus, they must instill from an early age the importance of work to obtain income and thus be able to fulfill their dreams in the future.

Distinguish the essential from the superfluous

The child has to understand the difference between a necessity and a luxury right from the first years of life . For example, explain to your child the difference between buying a carton of milk and a simple toy. Also explain that having a pair of shoes may be a necessity, but having many is already a luxury. Finally, include your children in choices and decision-making at home. Only then will they know how to deal with money and understand the difference between what is really important to have and what matters little or nothing.

Know the prices

To realize the value of money you need to know the prices of things . Thus, it is necessary to give them time and examples so that they understand how much each item costs. When asked to buy something you should explain to your children what this entails.

A good way for children to learn the value of money is when they ask to buy something, their parents suggest going to the “ piggy bank ”. That way, they will begin to realize how much money they have to “ lose ” to buy what they want.

Explain that everything has a cost and that the price depends on many factors, such as:

  • of transport,
  • of labor;
  • its distribution;
  • of the raw materials used,
  • among other things.

Knowing how to handle money: the difference between “spending” and “investing”

As children grow up, and when they already know what saving is, they should move on to the next stage. In this sense, you should explain to them that in addition to being important not to spend everything they have, they should also learn to multiply their money . In other words, they must invest. But how to teach this? You can start by offering them a book on this subject, play games that teach how to make money grow (monopoly, for example) or even show them some investment options. But always use simple language.

Assign a fixed allowance

If you decide to give your children an allowance, then opt for a fixed amount . Check how much you can give them, but always take into account their age and needs. Therefore, you must evaluate the expenses they have and what makes sense to give them for the correct management of their money.

On the other hand, you should only increase this value if it is really justified . After all, when you work and if the money doesn’t reach you by the end of the month, your boss won’t increase your salary. The same applies to your child. He has to learn to live with what he has.

Set savings goals

One way to encourage children to save is to always set goals according to their age. For example, if your child is 8 years old, you can encourage them to save money to buy a toy. But if he is 16 years old, it already makes more sense to save for a vacation or save money to go to university. There are several options, what matters is having a goal for the child or teenager to understand why they should save.

Only give money for essentials

For your child to understand where he should spend the money, it is important that you only give him the amount necessary to cover essential expenses , such as:

  • The feeding;
  • school transport;
  • school supplies;
  • and other justifiable needs.

Knowing how to handle money is knowing how to save a part

Another very important aspect is not to spend everything you receive . So, you should instill in your child the habit of always saving a portion of the money. The ways are several and all valid as long as he really doesn’t spend the whole “allowance”. For example, you can make a piggy bank or open a bank account for him . Explain to him how he can create a financial reserve for something important in the future if he doesn’t spend all the money.

Avoid purchases without criteria

Another thing you should teach your children from an early age is not to “ buy just for the sake of buying ”. That is, nowadays the incentive to consume is great and the temptations are many. In this sense, you must educate them to be patient, to think before having the “ impulse ” to spend the money. Is it really needed? Is money needed for something more essential? This applies to all of us, but even more so when we are children or teenagers!

Not having a lot of money in your wallet

With the growing use of digital money, we use less and less money in our wallets (the famous bills and coins). However, when we use bank cards too much, we sometimes lose track of what we spend and where we spend the money. So, for your children to learn to control the money they have, the ideal is to use only physical money (at least in the early days and a small amount).

Knowing how to deal with money: look for the best solutions

Another way to help your children know how to handle money is to get them used to finding the best solutions at the lowest possible price. If we can buy pants for €30, why are we going to pay €40? If we can have the same telecommunications service for 50€ why should we pay 60€? This must be the reasoning! For this it is important to learn how to research and compare prices . If possible, consider the “ share ” option.

Sell ​​what you don’t need

Who doesn’t have something they no longer use at home? Probably everyone! Teach your children to sell what they don’t need . For example:

  • clothing;
  • games;
  • toys;
  • books;
  • etc.

That way, they always earn some extra change to buy something they like or for their savings! In addition, it contributes to “ destroying ” your home.

Give to those in need

Knowing how to deal with money is also simply learning to “ give to those who really need it ”. If you like to help and don’t even have money problems, you can always tell your child to give. to any association that helps the most needy. Remember that you may not need it, but there are always those who need it!

Knowing how to handle money: borrow or transform instead of buying

Ever thought of borrowing instead of buying ? There are things you can ask someone instead of spending money unnecessarily. For example, a book or a CD/DVD.

Or, you can take advantage of existing parts for some purpose , instead of “buying new”. For example, pants that you have and don’t wear for some reason can be used to make shorts.

In addition, more and more people can find everything on the internet , from books, music, movies, among other things. But always use legal platforms, of course! Instead of buying a CD/DVD go to youtube, for example.

That way, instill in your child that not everything in life has to be bought! Sometimes, you just need to be imaginative and go the other way, which is cheaper by the way… in the end, it teaches them and prevents them from spending their lives asking them for things. Who has not seen the famous phrase, either in the supermarket or in a store, “dad, I want this”, “mom, I want that”.

Money costs everyone! And your children should learn this from an early age…

Promote your child’s skills

We all have our talents! Why not take advantage of them? Depending on age, there are always skills that can be put into practice to earn money . So there are a number of things your child can do, even if it’s on vacation. For example, if your child likes children, why not help take care of others? Or if he likes animals, why not walk pets? And if you like handicrafts, why not make some pieces and sell them? Or garden? DIY? When you have taste in something, you have to enjoy it.

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