There are only certain things that school can teach your child, and tips on surviving life isn’t one of them. Most adults still struggle with managing their finances thus it is crucial that for children to become financially independent from a young age.
Whether it’s saving up money to buy something, being a careful spender or the ability to transfer money to their bank account, etc. Applying the following suggestions will surely impart your child with such skills and make them well versed in managing finances.
Create a Specific Budget
Sit with your child and help them review their budget. Include all sources of income (monthly allowance, babysitting, and gifts) and calculate how much your child has in store. Help your child in calculating their expenditure, and if they have savings left up, suggest saving (which we’ll elaborate further), or if the allowance runs negative at the end, help your child in determining where they are overspending and where they should cut costs.
Also, give your child a specific weekly or monthly allowance for a task, for example, a set amount for outings. If your child spends it carelessly and finds that they are penniless before the next allowance, they will realize the value of careful spending.
Saving and Investments
Suggest your child open up a saving account and teach them to store up their savings in the account. Explain that saving (with a specific return) would grant the child a greater return in the future, with which he may be able to afford a car or some trip. Teach your child the value of stocks and investment, and how the market works.
The stock market fluctuates regarding prices, so make sure to tell your child how it works, and to invest a low sum of amount to be on the safe side. Suggest your child set aside a specific amount from his allowance, to save up for something big.
Also teach your child the importance of jobs, as an extra source of income for their needs.
Teach Your Child to Spend Less for More
It’s no big secrets that most shoppers wait for the sale season to buy things since they want to spend less for more. Using that same logic, explain to your child that when they are buying a specific product, suppose a new video game, do thorough research into the matter, and compare prices from different deals and different stores, so your child knows when they are getting the best. Introduce your child to generic brands, rather than the luxurious ones. Also, teach your child the art of patience and tell them to wait for specific products to go on sale or the value to decrease, and then purchase it.
Help Them on Starting a Career Plan
Sit down your child and discuss what they need to do as an adult, and the career path they want to choose. After that, discuss which college they want to join, the fee structure of that college and discuss the importance of saving to pay for and achieve that goal
Use Software to Keep Tab
Don’t be afraid to use apps or software in order to keep tab of spending. It is sometimes the little, but common spending (gas, coffee, books, etc.) that go unnoticed and pile up at the end. Help your child in being aware of their spending using apps.
These skills will surely make your child more financially independent and will help them tackle life with one less worry. Though being strict may make you feel like guilty as a parent at times, know that it is necessary for your child’s future!