No matter what your financial status is, it’s always wise to teach your children how to manage money. Maybe, you’re in dire need of cash, which is why you’re taking out payday loans in Salt Lake City. Or, you’re financially stable and you just want your kids to become financially responsible, as well. Here are some tips you can follow.
Teach them the difference between wants and needs
It can be difficult for young kids to distinguish “wants” from “needs.” So, you have to help them know what items they can and can’t live without. By learning the difference between the two, they will understand that the items they actually don’t need should not be a priority.
Explain the importance of saving money
Most kids also don’t automatically understand why they need to save money. But if you start teaching them about the value of money, then they might start saving their allowance. What you can do here is to give them a sample situation.
For example, your son wants the latest Xbox. What you should do is to check the price tag of that console and then, break down the amount he has to save every week until he has enough money to purchase it. If the item he wants is too expensive, suggest that he does more chores at home so that you’d increase his allowance.
Help them monitor their spending
Teach your children to monitor their daily spending. Ask them to jot down their everyday expenses. By the end of the week, add up all their expenses. If they’re trying to save money for that Xbox or a new mountain bike, go back to their budget sheet and ask them which of the items there could they take out to save more money.
Give them incentives
Another way to motivate kids to save money is to offer them incentives. If they want to save for a mountain bike, tell them that if they’re able to meet the halfway mark to their target goal by a certain period, you’ll give them an extra $75 to help them out. This way, they will look forward to meeting the halfway mark instead of feeling despondent because it’s hard to save money.
Talk to them about role models
The world is full of great role models for financial stability. One particular person that could serve as a role model for your children, aside from you, is Warren Buffett. Buffett is a billionaire investor and for a time, unseated Bill Gates as the richest man in the world.
Telling your kids about him might lull them to sleep. But if you tell them that as a child, Buffett collected comic books and ran a profitable library, your little ones might be inspired to find their own way of making a profit.
Teaching your kids to budget and save money will not only help them purchase items that they want on their own. It will also prepare them to be more financially responsible when they grow up. So, start as early as possible and help your kids save their own money.