Winmore

Children are never too young to learn some basic money-management steps. After all, financial skill is one of the primary life skills to master for navigating through life. If you want your child to grow up to be financially responsible and frugal adults, you have to do more than just say, “Money doesn’t grow on trees!”.

We would never push our children into a pool of water before teaching them how to swim. Likewise, parents need to educate children to be responsible with money as early as three years old. Following are the top five lessons to teach your child on how to spend money?

1. “You may have to wait before buying something”

Impulsive buying is something that even adults struggle to deal with. Thoughtless and unconsidered spending can add up over time to become a disastrous financial situation. Children should learn that if they really want something, they need to wait and save up for it. Delayed gratification needs to be developed to become a successful grown-up. Teach your child that visiting a store does not necessarily mean that you will always buy something for him or her.

2. “You have to make choices about how to spend money”

Every rupee spent is a choice made. Saving money has more to do with focusing on those choices than the cost of things. Teach your child that the money available is finite and the more they spend, the less they will save. In addition to giving them a piggy bank to save pocket money, include them in some of the financial decisions. Teach them the tactics of buying in bulk to reduce the per piece price.

3. “Compare rates and quality before buying anything”

It is good to be a little skeptical before buying things. While children are easily influenced by the commercials they see on the television, it is important to tell them about the various marketing tricks that companies use. Show them how to compare the same item sold by different brands and choose the best one. This will also teach them to compare other important things in life, like the courses and colleges to choose for graduation after high school.

4. “Buy things on credit only if you are sure to pay the amount in full”

If your child sees you swiping your credit card every now and then, they may take it for granted that most things are affordable. It is irresponsible to shop beyond one’s means and to have less or no savings. Teach your child to pay bills on time to avoid dues. Lay down the foundation of prioritizing needs over wants. While the needs are limited like the money we have, wants can be unlimited.

5. “Sharing feels good”

In the process of becoming economically wise, make sure that your child does not lose his or her sense of morality and ethics. During Christmas or other family occasions, suggest buying gifts for under-privileged children. Some children may willingly donate a part of their allowance to charity. Encourage and support them to do so by stressing on the good feeling they have while helping people.

The saving habit!

According to a Cambridge University study, core values like the need to save money will be formed by the age of seven. Yet without the guidance of parents, they may not understand complex financial concepts and the distinction between wants and needs. Here are 5 interesting ways to make your child more organized. With a little monitoring and directions, your child will grow up to be economically wise and secure.