Saving is a habit that you should start early. It doesn’t matter how rich your parents are, as people need to learn how to budget their money at an early age. These can be used for a variety of reasons, whether to buy that new XBox, or to save up for a college education. No matter what your purpose is, learning how to budget is an integral part of life and should be turned into a lifelong goal.
Here are some tips on how to teach your children, as young people, how to save up and budget their money:
1. Start them early
It’s never too early for people to learn how to budget their money. Teach children and young adults to save up on their allowances or income from jobs such as babysitting or mowing the lawn. It is recommended that you open up a savings account for them and let them see periodically just how much they have saved.
2. Let them learn the value of money
Sometimes, children actually do think that money grows on trees, at least metaphorically. Let them know that you cannot satisfy all of their whims, and they must also do their part to budget their own money as they cannot simply ask for more whenever they run out. Be honest about some financial matters so that they would better understand just how valuable money, and saving it up truly is.
3. Give weekly allowances
As compared to daily allowances, weekly allowances would greatly enhance young people’s budgeting skills as they would have to foresee future expenditures. Whatever amount they did not use up can then go automatically into savings. This is a much better arrangement than giving them money daily, where they mostly expect to start the day with nothing and end the day with nothing.
4. Let them work for the things they want
Are they badgering you about a new game console or even a new car? Lay out some rules that will more or less force them to save up. Offer to pay half the amount, and give your child a reasonable period to come up with his or her share. Adjust your share based on how long or how quickly they are able to come up with the m0ney.
This way, you and your child will have a joint effort in purchasing something that they wanted, and they will also be able to learn how difficult it is to save up and earn money, and they will soon realize how important budgeting really is, even for a young person.