Face it. Money management is something that you need to teach your child. The lack of teaching on your part will be evident in the future. They might spend frivolously and not save a dime. They will not know how it feels when they’ve earned their money. Money management teaching will help your child thrive and prosper in their future, while their peers squander theirs they will be thinking of you and how lucky they had you to teach them.
Every child you have should begin getting an allowance. There are several ways to this but to keep it cheap on you we’ll keep it simple. Each child should get the allowance of their age. So if you have a boy that is 8 years old he would receive 8$ ever week, or biweekly. Children need an allowance. It gives them the ability to have their “own” money. They will have that mentality too. Just watch as you see how slowly they spend it.
Spend it they will! When that happens get ready for them to ask you for some more money. I know what you’re thinking. They used it up. They did it themselves and they need to learn and they will learn, but not the way you want them to. Take the opportunity to teach them about loans and the interest rate that goes with them! This is a great way to teach them that it is better to purchase items with savings then to borrow for them.
Speaking of loans does your child have a savings account? It might be a good idea to open up one with them. In fact, its probably one of the best ideas you’ll ever give to your child. Teach them about the account and treat them as an adult when doing so. Let them know that whatever they save they will gain interest from. You could even take it a step further and tell them you’ll double whatever they save for the month or year.
Once your child knows what the account is for and how to use it let them. I cannot tell you how many parents I know end up ruining their children’s financial life because they want to control. Let your child take money out of the account when they want to. If you don’t let them, they will not save! It is that simple.
Money management teaching isn’t a one time teaching. It is a progression. You have to teach them step by step and hold their hand. Yes, sometimes they will fail, but help them back up. This is your children’s financial future on the line. Take it seriously.